WestLB, the German bank in the spotlight over losses at its principal finance business, signalled the end to the blood-letting of its top management yesterday and said it would continue to operate as an international investment bank.
The bank also confirmed the appointment of Johannes Ringel, picked last week to fill the top job at the bank when Juergen Sengera took responsibility for a series of operational failures and stepped down. Mr Ringel is expected to remain in place for up to a year before a permanent head is found.
In a statement released after a key meeting of its supervisory board in Dusseldorf, WestLB struck an upbeat note about the health of its business and about its future strategy, saying profits were up €350m (£242m) to €476m in the first five months of the year, before risk provisions.
WestLB shocked the market in May when it reported a €1.67bn loss, mainly due to a €1.9bn provision for possible bad debts. That move highlighted losses on one of the deals at its principal finance business, and attracted an investigation by the Germany banking regulator.
In defiance of some politicians and shareholders who wanted to see WestLB abandon all but its retail banking business, Mr Ringel has decided not to hive off WestLB's entire structured finance business, which includes the principal finance unit. It is, however, likely to cut down its activity in this market.
Robin Saunders, who heads principal finance in London, will now report to Manfred Puffer, currently on WestLB's management board.
WestLB said it would give more attention to the needs of the customers of the powerful savings banks, such as Germany's legions of small businesses.Reuse content