FRANKFURT - THE German regional bank BayernLB will have to cut costs and possibly sell some activities after asking for billions of euros in state aid, its boss said on Thursday.
A cost-reduction plan worth 150 million euros (S$285.3 million) per year will be increased to 400 million euros, Bayerische Landesbank boss Michael Kemmer told the business daily Handelsblatt.
Mr Kemmer also 'did not rule out' spinning off some of the bank's activities, though he said the Internet unit DKB and a southern European subsidiary, Hypo Group Alpe Adria, had nothing to fear.
On Tuesday, BayernLB said it would need 6.4 billion euros in fresh capital, of which 5.4 billion would be obtained from a German banking rescue package that was pushed through parliament last week.
The difference would come from BayernLB's owners, the southern state of Bavaria and regional savings banks.
Mr Kemmer acknowledged that 'we currently expect to depreciate the value of our assets by around 800 million euros,' owing to losses from risky investments, some of which were in Iceland, which has been slammed by financial turmoil.
He added that mergers with sister regional banks that might be interested in a tie-up to help them pull through the international crisis 'was not on the agenda for now.'
The BayernLB boss added, 'I do not think it will be before the end of the year, we are all tied up at the moment in managing the crisis.' -- AFP
