WestLB 2010 Loss Narrows on Lower Provisions for Bad Loans
WestLB AG, the state-owned German lender bailed out during the financial crisis, said its loss narrowed last year after it set aside less money for bad loans.
The net loss was 240 million euros ($340 million), compared with a deficit of 531 million euros in 2009, Dusseldorf-based WestLB said in a statement today. Provisions for loan losses dropped 70 percent to 242 million euros.
The lender needed bailouts from its owners, including the German state of North Rhine Westphalia and the country’s federal government, after running up losses during the global financial crisis. WestLB is seeking a buyer under conditions set by the European Union for approving the aid and said today that sale discussions with two bidders continue. Its owners last month submitted restructuring proposals for the bank to the European Commission, the EU’s executive arm.
“WestLB has proven in 2010 that its business model works,” Chief Executive Officer Dietrich Voigtlaender said in the statement. “We have strengthened our customer business and increased our client base, despite difficult conditions.”
WestLB’s core capital ratio, a measure of financial strength, rose to 11.4 percent at the end of last year after it reduced risk-weighted assets, from 8.2 percent at the end of 2009 and 6.4 percent at the end of 2008.
Risk-weighted assets are forecast to decline to 41 billion euros by 2015 from 52 billion euros by the end of March this year, the bank said today. Total assets will probably drop to 83 billion euros by 2015 from 125 billion euros by the end of March.
WestLB also expects sales of 1.15 billion euros at its main business by 2015, compared with 1.42 billion euros last year, while pretax profit at the main operations will probably fall to 319 million euros that year from 446 million euros in 2010, it said.
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