BayernLB Pretax Rises 29% on Fewer Risky Loan ProvisionsOliver Suess
Bayerische Landesbank, Germany’s second-biggest state-owned lender, said first-quarter profit rose 29 percent, helped by the release of provisions set aside for risky loans.
Pretax profit rose to 200 million euros ($273 million) from 156 million euros a year earlier, the Munich-based lender said in a statement today. It booked a 29 million-euro gain from risk provisions after setting aside 58 million euros a year ago.
BayernLB had reported a fourth-quarter pretax loss due to reorganization costs and a loss at its Hungarian unit MKB Bank, which it must sell by the end of 2015 on orders from the European Union to compensate for a government bailout during the financial crisis.
MKB Bank posted a loss of 9 million euros in the quarter compared to a loss of 61 million euros a year ago.
BayernLB appointed Johannes-Joerg Riegler as chief executive officer in March, replacing Gerd Haeusler. Haeusler said the same month that he was “optimistic” a sale of MKB can be done this year. Reuters reported on April 2 that the company is close to selling it to OTP Bank, Hungary’s largest lender.
BayernLB is targeting a pretax profit this year in its core business, which excludes MKB and the restructuring unit. The unit reduced its total loans and securities by 1.5 billion euros to 20.9 billion euros in the quarter.