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Germany's LBBW considers merging with peers

FRANKFURT
Fri Nov 21, 2008 1:04pm EST

FRANKFURT (Reuters) - Landesbank Baden-Wuerttemberg LBBW.UL, one of Germany's biggest state-backed lenders, said on Friday that it would consider merging with a state rival other than BayernLB [BAYLB.UL}.

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LBBW is prepared to discuss a merger not only with BayernLB but also with other state-backed lenders -- called "Landesbanks" -- Guenther Oettinger, prime minister of the German state of Baden-Wuerttemberg, where LBBW is based, said on Friday.

Earlier on Friday, the bank had said it sought to increase its equity capitalization by 5 billion euros ($6.26 billion) in the first quarter and may use loan guarantees from the government, but does not plan to take money from the government.

Germany's banks have been amongst the worst affected by the global financial storm. They took risky bets on a number of fronts, buying a mountain of subprime debt and lending heavily to stricken Iceland.

(Reporting by Peter Dinkloh; editing by Simon Jessop)
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