Bank Reorganization

Victim of Financial Crisis, BayernLB Regroups Under New CEO

ecclestone2 dpa
The new head of BayernLB is going after Bernie Ecclestone, saying the bank was cheated in sales of Formula One shares.
  • Why it matters

    Why it matters

    BayernLB’s new chief executive wants to settle lingering legal claims and turn the bank around.

  • Facts

    Facts

    • Johannes Riegler has been chief executive of Germany’s second-largest state-owned bank since April.
    • BayernLB wants to settle a claim against Formula One president Bernie Ecclestone or sue him.
    • The bank is selling a subsidiary, MKB, to the Hungarian government for €55 million.
  • Audio

    Audio

  • Pdf

The new head of BayernLB, Germany’s second-largest state-owned bank, is cleaning house. Johannes-Jörg Riegler, who was named chief executive in April, is ending a costly foray into Hungary, cutting costs and seeking closure on a legal case involving a former client, Formula One boss Bernie Ecclestone.

On Thursday, when asked about negotiations with the British business magnate, who had been accused of bribing bank officials to secure a lucrative German sporting contract, Mr. Riegler said the bank would press for a legal resolution.

“It’s still unclear whether we will sue or (whether) there will be a settlement,” Mr. Riegler said.

Mr. Ecclestone reached a settlement with prosecutors in a Munich court at the beginning of this month, agreeing to pay €75 million ($100 million) to end the case without admitting guilt. Mr. Ecclestone had offered BayernLB €25 million to drop its claims.

But Mr. Riegler said he wants more.

“The package wasn’t right,” the 50-year-old chief executive has recently said. The bank believes it was cheated during the sale of its Formula One shares in 2006. Mr. Riegler is also combative on other issues. The bank’s attorneys are pursing litigation at the European Court of Justice and the Austrian Constitutional Court, said Mr. Riegler, who was the former chief risk officer at another state-owned German bank, NordLB.

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.