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German bank SachsenLB to be taken over
Real estate news By Yahoo! News
Sun Aug 26, 1:55 PM ET
Germany's Landesbank Baden-Wuerttemberg will take over SachsenLB, a smaller public-sector bank that has been buffeted by its exposure to the U.S. subprime credit crisis, a German state governor said Sunday. LBBW will pay 250 million euros ($342 million) to troubled wholesale bank SachsenLB as an initial measure, said Guenther Oettinger, the governor of Baden-Wuerttemberg. He did not immediately announce further details.
News of SachsenLB's troubles emerged a week ago, when it said it received a 17.3 billion euro ($23.7 billion) credit line from other banks to help it counter risk from its subprime exposure. It said it had yet to tap that credit line. The daily Die Welt reported last week that a new liquidity gap totaling some 400 million euros ($547 million) had been discovered. The bank has declined to comment on that report.
On Thursday, one of the bank's executives, Stefan Leusder, who oversaw capital markets operations, said he would resign. Both the bank and its state owners agreed to his request. Sachsen-Finanzgruppe, which represents local savings banks and municipal authorities, holds about 63 percent of SachsenLB, with the eastern state of Saxony holding the rest.
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