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Banking crisis – Violent dispute over the rescue of the North LB economy

  • The battered North LB seemed just in time saved from bankruptcy. But now breaks out a violent dispute between their owners.
  • The federal states of Saxony and Lower Saxony are arguing with the savings banks, especially about the planned job cuts.
  • The savings banks apparently fear that up to 4,000 of the 5,650 jobs will have to be canceled.

From Meike Schreiber, Frankfurt

Many employees of Norddeutsche Landesbank took a deep breath when the state of Lower Saxony and the savings banks agreed in January on the rescue of the Hanoverian bank. The fourth-largest German Landesbank has relocated with ship loans and would have been simply broke if the owners had not hurried to promise them 3.5 billion euros of fresh capital. In return, it was said, the northern LB will shrink sharply. On 3 April, the Financial Regulator will approve the business plan of the old and new owners. This would mean that at least one of the currently major problem cases of the German banking industry would have been completed – while Deutsche Bank and Commerzbank continue to struggle for a good future plan.

To SZ-Informationen, however, have land and savings banks at the corners of the action divided. It is about the job cuts: "The country still believes that it will come off lightly," it said in Sparkassenkreisen. In order to have a viable business model, the North-LB but must reduce more than 3000, probably even 4000 jobs, it said. The bank has already announced it will cut 5,550 jobs by the end of 1250. The unions expect a further job cuts "in a similar dimension". The wishes of the savings banks with regard to job cuts go beyond that. The business volume, ie the total assets of the bank, should be halved anyway to 80 billion euros.

Banks and the financial industry BayernLB ex-board members are to pay up to ten million euros

Former members of BayernLB's executive board are expected to pay up to ten million euros

The former bosses have violated their obligations by buying the ailing Hypo Alpe Adria, is the district court of Munich and proposes a settlement.By Harald Freiberger

There is also dispute with regard to the capital increase. The state has pledged to give a total of 2.4 billion euros in the bank, while the savings banks and Landesbanken muster nationwide 1.1 billion. However, the country wants to give one billion euros of this only as a failure guarantee. And even that is it, according to Sparkassenkreisen now partially moved away, because some ship loans in the balance now allegedly several hundred million euros worth more. "They now use sleight-of-hand tricks," said a savings bank official who does not want to be named. Another said that the country wants to "sneak out". The bank is owned 60 percent of the country, the rest belongs to the savings banks. Finance Minister Reinhold Hilbers (CDU) had sold the rescue in February as the "best negotiating result".

He refuses to settle the bank. Not only the question of the capital increase annoys the savings banks. The state of Lower Saxony is also planning to pass some of the burden on the new co-owners, ie the savings banks in the rest of the Republic and the Landesbanken. For example, Hilbers does not want to recognize a loss carried forward by Bremer Landesbank and hopes that it will generate higher tax revenues. Last but not least, the savings banks are still arguing among themselves because the institutions in Lower Saxony want to leave the Braunschweigische Sparkasse subsidiary of Nord-LB differently than agreed in the bank. "If they pull it off, the business basis of our agreement is gone," said a savings bank official. Then the bank would have to be wound up or privatized in the end.

Taxpayers had to rescue numerous institutions in the financial crisis

A spokeswoman for Finance Minister Hilbers rejected the accusation that they wanted to steal responsibility. As long as the business model has not yet been decided, there is no figure for job losses. "We want a smaller, healthy and powerful bank in northern Germany, but our goal is to get as many jobs as possible." Speakers of the Savings Banks Association in Lower Saxony and the umbrella organization DSGV in Berlin did not want to comment. The Fingerhakeln between land and savings banks at the North LB shows an example of the unresolved problems of the Landesbanken. The institutes belong to both the federal states and the savings banks. Above all, the often different goals of the owners meant that the taxpayers had to rescue the institutions in the financial crisis. Too great was and is the temptation of politicians to promote certain industries with Landesbank funds. The savings banks would therefore prefer to have their own Landesbanken and merge them into an institution.

Until then there is still a long way to go: Bayern LB boss Edgar Zoller called the merger plans on Thursday "a difficult topic". Bayern-LB is not planning to change the ownership structure. "The Free State is a good owner for us."

Banks and the financial industry It's a shame what Scholz does

It's a shame what Scholz does

From megalomania Hasardeure drive the merger of Deutsche Bank and Commerzbank. Numbers will end up being the taxpayer again. When does someone finally intervene?Comment by Marc Beise


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