Germany's LBBW profit slumps on Greek charges
Germany's biggest regional bank, LBBW, said Thursday its second quarter net profit slumped after it took a charge of more than 450 million euros ($650 million) on its exposure to Greek debt.
It said its three months to June net profit came to just 24 million euros, down from a first quarter profit of 352 million euros.
LBBW said it cut the holding or book value of its Greek bond investments by half to 300 million euros.
Sales of derivatives linked to Greece resulted in an additional loss of 156 million euros, a statement said.
The bank said it still expected to post a profit for the full year but warned that the situation in global financial markets would "remain volatile and susceptible to crises.
"Moreover, economic prospects across the world are gradually becoming bleaker," the bank added.
LBBW continues to offload assets under a programme required by the European Commission in exchange for German state aid provided during the 2008-09 global financial crisis.
At the end of June, LBBW's total assets amounted to almost 355 billion euros, a decline of 5.2 percent from end-2010.
© 2011 AFP