• Germany's news in English

WestLB submits restructuring plan

The Local · 16 Feb 2011, 08:09

Published: 16 Feb 2011 08:09 GMT+01:00

Facebook Twitter Google+ reddit

These cuts came on top of a 2008 plan that already involved reducing its assets by half, the bank said.

The new proposals also included plans to ease the purchase or transfer of its assets by putting risky holdings such as bad loans in a “bad bank,” to be disposed of later when market conditions are more favourable.

The bank would split its activities into four parts, some of which could be taken up by savings banks and others sold to investors, said the bank.

These steps would incur new charges, which would be passed on to the shareholders, the regional and federal state authorities, the statement said.

It did not specify how much those charges would be.

Deputy finance minister Steffen Kampeter said they had put three options to the European Commission and that it was now up to them to respond, Dow Jones Newswires reported.

The owners of WestLB - regional savings banks and the German state of North Rhine-Westphalia, and the federal government - had until Tuesday to submit a plan to restructure the bank to the European Commission.

They were also expected to come up with candidates who were ready to take it over. Media reports have identified interested buyers as the US investment funds Apollo, JC Flowers and Lone Star.

WestLB got into trouble through risky investments in the US real estate market that went sour in 2007, and has depended on state aid since then to stay in business.

Story continues below…

The EU Commission approved the aid but demanded the bank be restructured and either made viable or sold off.

It called for more efforts from the bank in return for the €3.4 billion in public aid it had obtained to set up the "bad bank" facility into which the group has already dumped €77 billion of toxic assets.

If Brussels is not convinced by efforts to turn WestLB around, the Commission could order it be dismantled.


The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Creepy clown scare spreads to Germany
Two of the clowns were apparently equipped with chainsaws. Photo: Pedro Pardo / AFP file picture

Police said Friday five incidents involving so-called scary clowns had occurred in two north German town, including one assailant who hit a man with a baseball bat, amid fears that Halloween could spark a rash of similar attacks.

Student fined for spying on women via their webcams
Photo: DPA

Student from Munich fined €1,000 for spying on 32 different computers, using their webcams to take photographs, or record their keyboard history.

This is how much startup geeks earn in Germany
Photo: DPA

A comprehensive new survey of 143 startup founders shows how much you are likely to be earning at a German startup, from entry level all the way up to sitting on the board.

Man dies after beating for peeing near Freiburg church
The Johannes Church in Freiburg. Photo Jörgens Mi/Wikipedia

A middle-aged man from southern Germany has died after being attacked by a group of men who took umbrage with the fact he was urinating in the vicinity of a church.

The Local List
Seven German celebrities with uncanny doppelgängers
Former Berlin mayor Klaus Wowereit and actor Alec Baldwin. Photo: DPA; Gage Skidmore, Wikimedia Commons

Check out these seven look-a-likes of well known German figures - we admit that some are more tenuous than others...

Israel seeks to buy three new German submarines: report
A Dolphin class submarine. Photo: DPA

Israel is seeking to buy three more advanced submarines from Germany at a combined price of €1.2 billion, an Israeli newspaper reported Friday.

Here’s where people live the longest in Germany
Photo: DPA

Germans down south seem to know the secret to a long life.

More Germans identify as LGBT than in rest of Europe
Photo: DPA

The percentage of the German population which identifies as lesbian, gay, bisexual or transgender is higher than anywhere else in Europe, according to a new study.

'Reichsbürger' pair attack police in Saxony-Anhalt
File photo: DPA.

A "Reichsbürger" and his wife attacked police officers on Thursday, just a day after another Reichsbürger fatally shot an officer in Bavaria.

Five things not to miss at the Frankfurt Book Fair
Photo: DPA

From consulting a book doctor to immersing yourself in an author's world with the help of virtual reality, here are five things not to miss at this week's Frankfurt Book Fair, the world's largest publishing event.

Sponsored Article
How to vote absentee from abroad in the US elections
10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
Sponsored Article
How to vote absentee from abroad in the US elections
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd