Commerzbank plans 'bouquet' of payback measures: Blessing

9th September 2010, Comments 0 comments

The second-biggest German bank, Commerzbank, plans a "bouquet" of measures to reimburse the billions of euros it owes the state, boss Martin Blessing said on Thursday.

"It will probably not be a flower, but an entire bouquet," Blessing said during a banking conference in Frankfurt.

He did not provide details on when the process would begin but said possible measures included the sale of risky assets or retained earnings and added: "We are also considering raising money on capital markets."

In late August, the business daily Handelsblatt said Commerzbank might try to raise five billion euros (6.4 billion dollars) in the coming months to cut debt, which forces the bank to pay stiff interest on profits.

Commerzbank skirted bankruptcy in late 2008 and was saved with a rescue line worth 18.2 billion euros thrown by the government, which ended up with a stake of 25 percent plus one share in the bank.

Blessing also commented on talks over new bank reserve standards being drafted by the Basel Committee on Banking Supervision, saying they would not curb lending to households and businesses if associated with a sufficiently long transition period.

The German federation of private banks (BdB) estimated Monday that higher reserve standards aimed at bolstering the financial system could lead to a total credit reduction of one trillion euros (1.27 trillion dollars) if banks could not come up with the extra cash they needed.

© 2010 AFP

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