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Banks

Germany's LBBW to lose 350 mln eur on Iceland deals

FRANKFURT, Nov 8 (Reuters) - German state lender LBBW [LBBW] said on Saturday it expected losses of 350 million euros ($447.8 million) as a result of its exposure to the Icelandic market, facing a deep recession after the collapse of three major banks.

A spokesman for the regional lender in Stuttgart gave the figure to Reuters in response to an enquiry but would not give a total figure for LBBW’s exposure in Iceland.

“We expect a loss of 350 million euros from our Icelandic engagements,” he said.

The Sueddeutsche Zeitung daily had reported on Saturday that the bank’s exposure in Iceland totalled one billion euros.

Iceland has to rebuild its shattered economy after the financial crisis led to the bank crashes and left it scrambling to find funding from other countries and international lenders.

LBBW said on Friday it was considering taking part in the German government’s capital rescue package for banks to prop up their flagging finances in the crisis.

LBBW peer BayernLB last month was the first to take up the state’s offer, requiring 5.4 billion euros and citing among other problems Icelandic credit defaults.

Reporting by Hendrik Sackmann; editing by Patrick Graham

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