Crisis at state-owned German bank WestLB deepens
( dpa ) - State-owned German bank WestLB, hit last year by a large loss from speculative share trading, may need a cash injection of up to 2 billion euros (3 billion dollars), according to sources close to the bank.
An extraordinary shareholders meeting Sunday evening was discussing where the additional capital should come from.
A separate report to be published in Monday's Rheinische Post newspaper said WestLB management planned to cut 2,000 jobs at the bank, half at home in Germany and half abroad.
The largest shareholder in the Dusseldorf-based bank is the state of North Rhine-Westphalia, which holds 17.1 per cent directly and a further 20.4 per cent indirectly through the NRW.Bank.
The reports said the shareholders in Germany's third-largest state bank, including two regional savings banks, were in conflict over who should come up with the necessary funding.
No funds have been earmarked in the 2008 budget of North Rhine- Westphalia.
The shareholders were said to be considering seeking private input, although the savings banks have in the past opposed this.
WestLB is reported to have lost more than 600 million euros through share transactions and has also been hit by the financial market turbulence generated by the US subprime mortgage crisis.
The bank reported a loss of 148 million euros for the first nine months of last year and said in December it would show a loss for the full year. dpa rpm sc