Nov. 23 (Bloomberg) -- Bayerische Landesbank, Germany’s second-biggest state-owned lender, started repaying government aid it received during the financial crisis.
BayernLB paid 350 million euros ($452 million) to the state of Bavaria for aid received in 2008, its first payment, the Munich-based lender said in an e-mailed statement today.
The repayment “is an important signal to Bavaria’s taxpayers,” Bavarian Finance Minister Markus Soeder said. “This is also the result of the changeover to a much smaller but more customer-oriented and lower-risk business model.”
BayernLB, led by Chief Executive Officer Gerd Haeusler, got European Commission approval for its government bailout in July. As part of the agreement, BayernLB has to repay 5 billion euros in state assistance by 2019 and cut its balance sheet in half from the level of 2008. BayernLB also agreed to avoid acquisitions and dividend payments and to sell assets including mortgage-lending unit LBS Bayern and real estate unit GBW AG.
BayernLB, which announced plans in 2008 to refocus operations and reduce the workforce by 2013, began the process of selling a 92 percent stake in Munich-based GBW last month. The company has said it expects to complete the sale in the second quarter of next year. GBW owns more than 32,000 apartments in Bavaria, with about two-thirds located in Munich, Nuremberg and Regensburg.
“Numerous companies” signaled their interest in GBW by a Nov. 9 deadline, and BayernLB expects indicative bids before Christmas, it has said.
In a separate statement today, the bank said it will realign its business to separate activities it intends to keep from those being shut down or sold. BayernLB also appointed Michael Buecker, 50, to the management board, effective Feb. 1, to replace Jan-Christian Dreesen, who is leaving to become chief financial officer of soccer-club FC Bayern Muenchen. Buecker has run Commerzbank’s asset-management subsidiary Commerz Real AG since 2009.
BayernLB agreed earlier this year to sell its DKB Immobilien AG real estate unit to Hamburg-based TAG Immobilien AG for 160 million euros.
BayernLB last week reported a 78 percent rise in nine-month pretax profit to 271 million euros. Losses at Budapest-based MKB Bank, a unit that’s slated for eventual sale, shrank to 131 million euros in the period from 186 million euros a year ago.
To contact the reporter on this story: Oliver Suess in Munich at email@example.com