WestLB loss on sub-prime crisis

Exposure to the US sub-prime crisis has led to a higher-than-expected loss for 2007 at German regional bank WestLB.

The bank made a net loss of 1.6bn euros (£1.3bn) in 2007, compared with a 799m euro profit in 2006.

One of its owners, the state of North Rhine-Westphalia, has backed a 5bn euro rescue package, which could involve the loss of between 1,300 and 1,500 jobs.

Meanwhile West's boss has hinted that that the lender may be interested in finding a partner.

'Consolidation'

"We are tackling the restructuring of the bank with full power," said chief executive Alexander Stuhlmann.

"With this, the bank is readying itself to play its role in the consolidation of Germany's landesbanks."

Officials at the state of North Rhine-Westphalia have indicated that Germany may only need two landesbanks.

The banks are regional lenders that serve community savings banks, and at present there are seven of them.

Trading losses

WestLB is one of Germany's biggest casualties of the collapse of the US market for high-risk, or sub-prime, mortgages.

Trading losses in shares of BMW, Volkswagen and Metro also hurt the bank's bottom line.

The job losses could amount to one-quarter of the bank's 6,000 staff.

European regulators are investigating whether the rescue package violates EU rules.

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