Subprime-hit German bank foresees loss as high as €700 million
Deutsche Industriebank AG, a German bank bailed out last month by the government, said Monday that it expected losses of €600 to €700 million ($818 to $954 million) for this fiscal year after being hit by the US subprime mortgage crisis.
The bank that lends to medium-sized businesses ran into trouble after betting the wrong way on the high-risk home loans. IKB nearly collapsed before state-owned KfW, a bank set up immediately after World War II to finance German reconstruction, stepped in with a €3.5 billion ($4.77 billion) rescue package. The loss will be booked in the fiscal year that ends March 31, IKB said. In the most recent fiscal year, it earned €179.6 million ($245.1 million). (m&c.com)
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