Wednesday, February 13, 2008

IKB Bailout Hatrick

Click here to read my earlier rants on the IKB mess.... Here comes another good rant from the FT Let it fail, Mitteleuropa edition

Klickt bitte here um sich meine vorherigen Tiraden zur IKB anzusehen.... Hier als Nachschlag noch ein deftiger Kommentar der FT Let it fail, Mitteleuropa edition
Comment from the anual report before the troube began.....
Auszug aus dem Konzerngeschäftsbericht 2006/07 der IKB / PDF als die Welt noch in Ordnung war ......

The capital released through our securitisation activities over recent years has been used to expandour national and international lending business. Additionally, the capital has also been used to investing international loan portfolios. Two thirds of our investments are focused on US investment-gradeportfolios (including, for example, credit card claims,mortgage loan claims and corporate loans), with theremaining third being invested in similarly structured European portfolios.

Das durch die Verbriefung während der letzten Jahre freigesetzte Kapital haben wir für die Ausweitung unseres nationalen und internationalen Kreditgeschäftes genutzt. Darüber hinaus haben wir dieses Kapital verwendet, um in internationale Kreditportfolien zu investieren. Unsere Investments konzentrieren sich zu zwei Dritteln auf mindestens Investmentgrade-geratete US-Portfolios (wie zum Beispiel Kreditkartenforderungen, Hypothekenkreditforderungen sowie Unternehmenskredite) sowie zu einem Drittel auf europäische Portfolien mit ähnlichen Strukturen.

This "adventure" combined with incompetence from the board, management and oversight has cost the German taxpayer now close to € 7 billion....... It´s almost like MBIA, Ambac & Co that earned easy money with their muni bond insurance and got greedy..... IKB was once the leading German Mittelstandsbank with superior knowledge and a very high reputation. But they have decided to leave their core business....
Dieser "Ausflug" kombiniert mit totaler Inkompetenz vom Management, Aufsichtsrat und der Aufsicht hat den deutschen Steuerzahler mal eben die Kleinigkeit von 7 Mrd € gekostet......Man kann das wohl mit MBIA, Ambac & Co vergleichen die ebenfalls auf einer Art Gelddruckmaschine saßen und dann zu gierig wurden und den Bereich der öffentlichen Anleihen verlassen haben. Die IKB war einst die führende Mittelstandsbank in Deutschland mit erstklassiger Expertise und einem ausgezeichneten Ruf. Nachdem man sich entschieden hat anstelle des Mittelstandes lieber waghalsige US Hypotheken und Konsumenten zu unterstützen sollte der tiefe Fall nicht weiter überraschen. Schade nur das für Banken offenbar andere Maßstäbe als für die restlichen Branchen gelten......
NYT FRANKFURT — The German government said on Wednesday that it would participate in a third bailout of IKB Deutsche Industriebank, the lender whose near-collapse in July heralded the arrival in Europe of the crisis stemming from the faltering subprime mortgage market in the United States.

The German finance minister, Peer Steinbrück, said in Berlin that the federal government would contribute two-thirds of a rescue package totaling 1.5 billion euros ($2.2 billion). The question of where the remaining euros would come from was open, he said, but a government spokesman said that private banks were expected to contribute.

Mr. Steinbrück spoke after a lengthy meeting of the board of KfW, the state-owned bank that is the largest shareholder in IKB.

The rescue package aims to resolve the problems at IKB, based in Düsseldorf, which was once a conservative corporate bank but became a global symbol of risky excess.

Like many banks, IKB speculated in securities linked to American mortgages. But the market value of those investments has fallen significantly, forcing KfW, which owns 38 percent of the bank, and a consortium of private banks, to recapitalize the lender.

As it became clear that IKB was close to using all of the 5.65 billion euros previously committed to cover losses, discussions began about how to permanently rescue the bank. .....

KfW primarily focuses on development projects abroad and selected lending programs in Germany. It has been able to finance previous rescues of IKB — the last one was in late November — from its existing resources, but needed more money from Berlin to both support IKB and keep up its other work.

The prospect of direct state support for IKB generated cries that the banking industry, having profited from speculation in subprime-linked securities, was now handing the German taxpayer the bill for its losses.



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