WestLB AG, the state-owned German lender being broken up, plans to shift about 1,000 workers to a new unit called the SPM service company that will help other lenders wind down bad loans and securities.
About 400 employees will join a separate restructuring unit and another 400 will transfer to the so-called Verbundbank unit that will serve regional savings banks and belong to Landesbank Hessen-Thueringen, Chief Executive Officer Dietrich Voigtlaender said today, spokesman Armin Kloss confirmed. The restructure will mean job reductions for the 4,300 employees, Voigtlaender said, without saying what the plans are for the remaining 2,500 workers.
The European Commission in Brussels yesterday authorized 11 billion euros ($14.4 billion) in state aid for the transfer of assets to a bad bank after WestLB and its shareholders agreed to a restructuring plan. The commission decision on WestLB ended one of its longest-running banking state-aid cases. 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 in 2008.
WestLB won’t be able to sell large businesses in the current market and therefore will aim to divest smaller assets, Voigtlaender said at a press briefing in Dusseldorf. The goal is to privatize the new SPM service unit, which belongs to the state government, by 2016 at the latest, he said.
WestLB said last week that the planned sale of its real- estate unit, Westdeutsche Immobilien Bank, to Apollo Global Management failed because the price was “not acceptable.”
To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at email@example.com