German Bank about to go under:
AFX News Ltd. London : Financial News Products
IKB Deutsche Industriebank AG needs 2 bln eur in additional guarantees to cover risks from failed investments related to the US subprime market, a re-evaluation of its securities portfolio has shown, Frankfurter Allgemeine Sonntagszeitung (FAS) reported.
The total amount of IKB's financial risks now amounts to 11.5 bln eur, the newspaper said, citing capital market sources.
Neither IKB's shareholder KfW Bankengruppe nor IKB itself are able to cover for the new deficit, the report said.
A group of private-sector banks, which has already pledged almost 1 bln eur in guarantees to IKB is now being urged to provide an additional 2 bln eur in funds, but the group of banks has so far resisted the pressure, FAS said.
Meanwhile, Sueddeutsche Zeitung cited unnamed sources as saying that the German government, development bank KfW and several private-sector banks are working on a new package of financial guarantees for IKB.
The paper cited unnamed KfW supervisory board members as saying IKB faces further writedowns of 1.3-1.8 bln eur related to US mortgage backed securities.
Previous guarantees worth 5.3 bln eur that were given to IKB have already been all but exhausted, Sueddeutsche Zeitung said.
Story in German:
Faule US-Kredite: Weiteres Milliardenloch bei der IKB aufgetaucht - Wirtschaft - SPIEGEL ONLINE - Nachrichten
Anyone with an account with this bank should withdraw now IMO.