Eastern German savings banks write down LBB stake to 1 euro
BERLIN Dec 7 (Reuters) - Eastern Germany's savings banks have written down their stake in stricken Landesbank Berlin (LBB) to 1 euro, the head of the association representing them said.
"We have drawn a line under it in the hope that we're through now," OSV President Michael Ermrich told Reuters, adding that he did not expect a dividend from LBB in the next two to three years.
On Friday, sources had told Reuters that Germany's savings banks would have to shoulder as much as 1.2 billion euros ($1.6 billion) in further writedowns on LBB, which is being dismantled into a savings bank and a real estate business.
About 400 German savings banks bought LBB for more than 5.5 billion euros ($7.5 billion) in 2007. They had already booked 2.2 billion in writedowns already in previous years, about 40 percent of the original purchase price.
Germany's landesbanks, which belong to state governments and whose main purpose is to support their regional economies, lost billions of euros on risky investments in the financial crisis. ($1 = 0.7308 euros) ($1 = 0.7308 euros) (Reporting by Klaus Lauer; editing by Jane Baird)