German financial group Bankgesellschaft Berlin has made additional loan provisions at its wholly owned subsidiary Landesbank Berlin, doubling them to €360m (DM704m). The audit was initiated by both the group’s supervisory and its management boards. At the same time, the banking authority, BAKred, has launched several audits relating to the group’s property business.
Bankgesellschaft Berlin and its subsidiaries, Landesbank Berlin and Berlin Hyp, the mortgage bank, in which it has a 87.6 % stake, had announced a group operating profit before loan provisions of around €762m (DM1.49bn). A final figure for loan provisions is not expected to be available before May. According to reports Wolfgang Rupf, chief executive of the group, has mentioned a figure of €665m (DM1.3bn).
It is expected that the shareholders of the group, which is 56.6 % owned by the State of Berlin, will have to provide fresh equity of €1bn to €1.5bn (DM1.9bn to DM2.9bn). Other shareholders of Bankgesellschaft are Gothaer Beteiligungsgesellschaft (10%), NordLB (15%) while the remainder (18.4%) is in free float.
