It hasn’t been easy for Germany’s Landesbanken over the last six years. Many of these banks, which are part-owned and guaranteed by the states, made bad loans and acquisitions ahead of the 2008 financial crisis and had to be bailed out to the tune of billions of euros by the German government.
For these banks, the legacy of the financial crisis remains a daily worry. Now, two of these state-owned banks, Bavaria’s Bayern LB and the Stuttgart-based LBBW, may have succeeded in shedding a major remaining portion of the bad loans on their books.
The asset sales could hardly have come at a better time. Germany’s Landesbanken are among the 127 European financial institutions currently being subjected to a comprehensive review of their balance sheets by the European Central Bank, the results of which will be released in October.
“We’re happy it’s over,” BayernLB chief executive Jörg Riegler said Thursday as he announced the sale of its Hungarian subsidiary, Magyar Külkereskedelmi Bank, or MKB, to the Hungarian government.