BayernLB Reports Quarterly Loss on Restructuring Costs

Bayerische Landesbank, Germany’s second-biggest state-owned lender, reported a pretax loss for the fourth quarter on restructuring costs and as its Hungarian unit hurts earnings.

The pretax loss was 520 million euros ($718 million) for the quarter, the Munich-based lender said in a statement today. That compares with a pretax profit of 405 million euros reported a year ago. Full-year net income declined 84 percent to 120 million euros.

BayernLB Chief Executive Officer Gerd Haeusler will hand over the job to Johannes-Joerg Riegler at the end of the month. The new CEO will have to continue with the lender’s restructuring that includes the sale of MKB Bank by 2016 on orders from the European Union. BayernLB also agreed to return 5 billion euros in state aid to Bavaria by 2019, part of a 10 billion-euro capital injection that saved it from collapse during the financial crisis.

Riegler joins from state-run Norddeutsche Landesbank Girozentrale, where he was as the management board member responsible for business with savings banks and risk management. Among his main task will be the sale of Budapest-based MKB Bank and resolving legal disputes over the 2007 takeover and 2009 sale of Austrian lender Hypo Alpe-Adria-Bank International AG, whose two-year ownership has resulted in losses of 3.7 billion euros for BayernLB.

To contact the reporter on this story: Oliver Suess in Munich at osuess@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net Steve Bailey

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.