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FINANCIAL CRISIS

Lone Star aiming to sell subprime victim IKB

US investment fund Lone Star has begun the process of selling the German bank IKB, the country's first financial crisis victim, which Lone Star bought in 2008, an executive said Wednesday in an interview.

Lone Star aiming to sell subprime victim IKB
Photo: DPA

“The bank has been cleaned up and is now attractive for a new strategic partner,” Lone Star’s European boss Bruno Scherrer told the business daily Handelsblatt.

“We are going to present IKB to potential investors in November. A sale in the first quarter of 2011 is possible,” he added.

IKB, which specialises in business loans, was ruined by the financial crisis that erupted in mid 2007 owing to speculative investments made in the US market for high-risk or sub-prime mortgages.

German authorities were forced to inject €10 billion ($14 billion) to save the institution, before selling it to Lone Star for just €137 million, which raised an uproar in the country.

Scherrer told Handelsblatt that IKB, could hope to make “substantial profits” within two to three years.

In the first quarter of its 2010/2011 fiscal year, which ended on June 30, IKB nonetheless posted another net loss, of €125.2 million.

AFP/rm

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US

Germany welcomes US troop withdrawal freeze under Biden

The German government on Friday welcomed a decision by President Joe Biden to put on hold plans to reduce US troops in Germany, saying their presence was in the countries' mutual interest.

Germany welcomes US troop withdrawal freeze under Biden
An American soldier stationed in Germany, in front of Dresden's Military History Museum in 2016. Photo: DPA

“We have always been convinced that American troops being stationed here in Germany serves European and transatlantic security and hence is in our mutual interest,” German government spokesman Steffen Seibert told reporters.

As part of a major foreign and security policy overhaul presented Thursday, Biden announced a freeze on plans set in motion by his predecessor Donald Trump to reduce the US troop presence in Germany, a cornerstone of NATO security since the start of the Cold War.

READ ALSO: What could Joe Biden as US president mean for Germany?

Trump's decision was seen as linked to his tense relationship with German Chancellor Angela Merkel and his frequent complaints that Europe's top economy spent too little on defence.

The United States has had US troops stationed in Germany since World War II but their numbers have declined since the fall of the Berlin Wall from some 200,000 soldiers in 1990 to 34,500 today.

Although the prospect had been looming for years, Trump's decision in July to redeploy 12,000 soldiers from Germany still came as a shock, particularly to towns that have built strong economic and cultural ties to the US military.

READ ALSO: Trump to withdraw 'thousands of US soldiers from Germany' under Biden

“We strongly value the close, decades-long cooperation with the American troops stationed in Germany,” Seibert said.

He said the communities hosting GIs appreciated their presence, calling the bases “part of the lived transatlantic friendship”.  

Seibert said German officials were in “consultations” with the US administration about “further planning” but that the decision how to shape the future American military footprint in Europe was a “US domestic issue”.

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