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Old 3rd September 2007, 09:19 AM
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IKB to Post Full-Year Loss of as Much as $954 Million

Seems that only German banks are posting significant losses on securetized mortgages!

No one else, from Americans, to British, to the Chinese, to the Australians are posting significant "material losses".

Are sophisicated investors found everywhere except in Germany??? :o

In Asia, might be a different situation.

In Japan, the ninjas have stolen the books, so the CEO has conduct a manhunt!

In China, the public books doesn't record bad stuff, while the internal books (which are real) are intentionally messed up, no one knew where the money went!



http://bloomberg.com/apps/news?pid=2...ol8&refer=home

IKB to Post Full-Year Loss of as Much as $954 Million (Update2)

By Elena Logutenkova and Chia-Peck Wong
Enlarge Image/Details

Sept. 3 (Bloomberg) -- IKB Deutsche Industriebank AG, the German bank that's being bailed out after investing in U.S. subprime loans, will post a loss of as much as 700 million euros ($954 million).

The bank will curtail investments in international structured securities, such as asset-based debt, and expects future earnings will be ``significantly lower'' than in previous years, Dusseldorf-based IKB said in a statement today. Profit in the 12 months ended March 31 amounted to 179.6 million euros.

IKB received a bailout from state-owned KfW Group and German banking associations after rising defaults on U.S. home loans to people with patchy credit histories drove down the value of mortgage-based securities. The bank replaced Chief Executive Officer Stefan Ortseifen and Chief Financial Officer Volker Doberanzke with managers from KfW, which owns 38 percent of IKB.

``We knew it would cost a lot of money so this didn't come as a shock,'' said Johannes Thormann, an analyst at WestLB AG in Dusseldorf. He has a ``hold'' rating on the stock.

IKB shares declined 45 cents, or 3.2 percent, to 13.55 euros by 10:17 a.m. in Frankfurt. The stock has fallen by almost half since the end of June, valuing the company at 1.2 billion euros.

Special Audit

IKB has enough money to cover its operations for the next six months without having to raise new funds, the bank said today. The company will publish results for the quarter ended June 30 after a special audit by PriceWaterhouseCoopers.

The bank will focus on German corporate banking, leasing and private equity, as well as structured finance and real estate financing, IKB said.

KfW and German banking associations have agreed to cover as much as 3.5 billion euros of potential losses at IKB and its affiliate Rhineland Funding Capital Corp., which invests in and sells short-term debt backed by assets including subprime mortgages. KfW also assumed all of IKB's funding obligations to Rhineland Funding, totaling about 8.1 billion euros.

Companies that depend on commercial paper, debt due in 270 days or less, are facing funding shortages as investors refuse to buy debt secured by assets including subprime mortgages. Landesbank Sachsen Girozentrale, a German state-owned bank, got 17.3 billion euros in emergency funds last month after subprime-related investments soured.

Fitch Ratings last month cut IKB's individual credit rating to ``F'' from ``C,'' saying the bank would have defaulted without the rescue by KfW.

To contact the reporter on this story: Chia-Peck Wong in Hong Kong at cpwong@bloomberg.net Elena Logutenkova in Frankfurt at elogutenkova@bloomberg.net
Last Updated: September 3, 2007 05:00 EDT




China Construction Bank holds 1.06 bln dlrs in subprime securities

Aug 26, 2007

HONG KONG (AFP) — China Construction Bank, the country's third largest lender, said Monday it held 1.06 billion dollar of securities backed by US subprime mortgages but added it will have limited impact on the group.

The lender said it has set aside 139 million yuan (18.3 million US) as provision for investments rated "AA" or above.

Last edited by touchring; 3rd September 2007 at 09:39 AM..
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Old 3rd September 2007, 06:23 PM
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Re: IKB to Post Full-Year Loss of as Much as $954 Million

Quote:
Originally Posted by touchring
The bank will focus on German corporate banking, leasing and private equity, as well as structured finance and real estate financing, IKB said.
This is the most telling statement.

They, along with a lot of others are no longer happy doing business with Wall Street, as the risk are now perceived as being far too high in relation to the rewards.
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