German IKB details capital hike, slashes profits
( Reuters ) - Struggling German bank IKB detailed a 1.5 billion euro ($2.2 billion) capital increase, slashed its 2006/07 profit and forecast a 550 million euro loss for the 2007/08 financial year in a statement released late on Saturday.
German Finance Minister Peer Steinbrueck had outlined the rescue package for the subprime-stricken lender on Wednesday, IKB's third bailout since it nearly went under in July and became one of Germany's main casualties in the global credit crunch.
IKB said it would ask its shareholders to approve a 1.487 billion euro cash capital increase at its annual general meeting on March 27.
KfW, a German state-owned development bank which is IKB's main shareholder, had promised German financial regulator BaFin that IKB would receive at least 1.250 billion euros from the capital increase, IKB said.
KfW would also increase IKB's core capital by 600 million euros, IKB said.
IKB restated its 2006/07 financial results, revising down net profit by 141.8 million euros to 37.9 million euros, and revising down its capital levels by 206.2 million euros to 1.191 billion euros. Shareholders would not receive a dividend, the bank added.
For the 2007/08 financial year, the bank said it expected to make a loss of 550 million euros - smaller than its previous estimate of a 700 million euro loss due to a revaluation of its assets and liabilities.
"The actual estimate of the result is still subject to significant uncertainty," IKB cautioned. "Higher losses could result from the sale of part of the portfolio."