IKB Deutsche Industriebank, a German bank affected by the crisis in the U.S. subprime mortgage market, which the government rescued from collapse last month, announced on Monday that it expects a loss of between 600 and 700 million euros due to the consequences of the credit crisis in this fiscal year.
This bank, which issues loans to medium-sized enterprises, has encountered problems due to poor investments in high-risk mortgage loans. IKB was saved from complete collapse by the state bank KfW, established immediately after World War II to finance the reconstruction of Germany. KfW stepped in with a rescue package worth 3.5 billion euros. The loss will be recorded in the fiscal year ending March 31, IKB stated. In the last fiscal year, the bank reported a profit of 179.6 million euros. (H)
