Open

Coming up

Don't miss

Replay


LATEST SHOWS

FOCUS

Lebanon: Syrian civil war spillover heightens tensions in Tripoli

Read more

ENCORE!

Art show: From Frank Gehry's glass sails to Paul McCarthy's sex toys

Read more

INSIDE THE AMERICAS

US midterms: The battle for Colorado

Read more

IN THE PAPERS

Dominique Strauss-Kahn reacts to suicide of his business partner

Read more

BUSINESS DAILY

The robot workforce is coming

Read more

WEB NEWS

Video highlights problem of street harassment in New York

Read more

DEBATE

The battle for Kobane: Peshmerga, FSA join fight against IS group

Read more

DEBATE

The battle for Kobane: Peshmerga, FSA join fight against IS group (part 2)

Read more

AFRICA NEWS

Burkina Faso: Thousands protest against president's plan to extend rule

Read more

American group buys German bank IKB

Latest update : 2008-08-21

German bank IKB, the biggest German casualty in the U.S. subprime crisis, has been taken over by an American private equity group. Financial details were not disclosed.

US private equity group Lone Star is to take over IKB, the German bank rescued by the state development bank KfW after collapsing because of the subprime mortgage crisis, KfW said Thursday.

Lone Star is to buy KfW's 91 percent stake in IKB. Financial details were not disclosed. Further details were due at a news conference in Frankfurt later on Thursday.

IKB, a specialist in loans to small- and medium-sized business, invested heavily in securities tied to high risk subprime mortgages in the United States.

When US homeowners began defaulting on these home loans, these securities plunged in value and cost banks around the world hundreds of billions of dollars as they wrote off their investments.

In Germany, Europe's biggest economy, the first and biggest casualty was IKB. To prevent it going bankrupt it was bailed out to the tune of several billion euros gathered by the government, KfW and private German lenders.

Lone Star saw off other bids from Swedish bank SEB and fellow US private equity group Ripplewood, sources said. Two state-owned German banks, BayernLB and WestLB, were also interested but withdrew from the bidding.

Date created : 2008-08-21

COMMENT(S)