Landesbank Sachsen Girozentrale, the German state-owned lender which had to receive €17.3 billion in emergency funds, has forecast a loss for the year because of higher risk provisions and writedowns.
The bank had a loss of €54 million for the first nine months, the Leipzig-based company reported. In the first half of 2007 it made profits of €28 million.
SachsenLB, which agreed to a takeover by Landesbank Baden- Wuerttemberg in August, said that it could not forecast the size of the annual loss because of market uncertainty. The bank had to receive emergency funding after its Irish-based affiliate, which invested in asset-backed securities including US subprime loans, was not able to sell short-term debt on the market.
The bank's interest income for the first nine months was €102 million. In the first half of the year interest income was €109 million. Risk provisions and writedowns reached €351 million in the nine-month period after being only €39 million in the first half of the year.
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