At least good to see the LWWest in a position to contemplate a...

At least good to see the LWWest in a position to contemplate a new venture and it's not all doom and gloom for them. Hopefully that gives CNP at bit a room.


German bank IKB sold for 150 million euros reports

Sunday August 24


BERLIN AFP German bank IKB, a casualty of the subprime mortgage crisis, was sold to US private equity group Lone Star for 150 million euros German media reported Saturday.

According to informed sources, the amount of the sale is 150 million euros 222 million dollars the newspaper Die Welt said.

IKB had been rescued by state development bank KfW which earlier this week did not disclose the sale price of its 91 percent stake in IKB. KfW said only that it was a low three digit million euro amount meaning presumably anything between 100 to 300 million euros.

IKB, a specialist in loans to small and medium sized business based in Duesseldorf, invested heavily in securities tied to high risk subprime mortgages in the United States.

When US homeowners began defaulting on these home loans these securities plunged in value and cost banks around the world hundreds of billions of dollars as they wrote off their investments.

In Germany Europes biggest economy IKB was the first and biggest casualty of the subprime mortgage meltdown. To prevent it going bankrupt it was bailed out to the tune of several billion euros gathered by the government KfW and private German lenders.

A spokeswoman for the finance ministry cited by several newspapers Saturday indicated that the state would carry a guarantee up to 600 million euros on any possible new losses by IKB.

Dallas based Lone Star saw off bids from Swedish bank SEB and fellow US private equity group Ripplewood sources said. Two state owned German banks BayernLB and WestLB were also interested but withdrew from the bidding.

The sale still needs to be approved by KfWs supervisory board and by others including BaFin the German financial supervisory authority and the European Commission.