WestLB suffers more losses

Robin Saunders forged the deal with Boxclever

German state-owned bank West LB has reported another loss, and set aside more money to cover its costly buyout of UK television company Boxclever.

Germany's financial regulator, which has criticised the bank for taking inadequate measures to protect itself against bad loans, ordered WestLB to increase its risk provisions.

The bank has now set aside 615m euros (£433.6m) for this purpose, about a third of which is thought to relate to fallout from the controversial deal with Boxclever.

West LB says this money will now ensure that all potential risks linked with its investments in the television rental firm will now be covered.

Last year, the Boxclever deal led to the principal finance unit sustaining losses of £354m, helping push the bank into a 1.7 billion euros (£1.17bn) pre-tax loss.

WestLB confirmed on Wednesday that those losses continued in the first half of this year, with the bank sinking 359m euros into the red.

The bank warned that the financial strain is likely to lead to more job losses, but did not say how many.

The bank's chairman, Johannes Ringel, also defended Robin Saunders, the high-profile London-based banker who led the Boxclever deal.

Earlier this year WestLB confirmed it was considering selling the principal finance unit but stepped back from immediately hanging up a "for sale" sign.

Ms Saunders has been reported to be among those interested in buying it.