German Bank HVB Sees Earnings Fall
%mlink(STRY:; PHOTO:; AUDIO:%)
FRANKFURT, Germany (AP) _ Munich-based HVB Group, Germany’s second largest bank, on Wednesday posted a 360 million euro ($353 million) net loss in the third quarter and named a new chief executive officer to take over starting in January.
The loss for the third quarter compared with a profit of 68 million euros in the same period a year earlier.
Earnings for the first nine months fell to a bare 67 million euros ($66 million), from 667 million euros in 2001. The company cited plunging stock markets and an increase in bad loans caused by the sluggish economy.
The bank’s shares plummeted on the news, falling 11.8 percent to 14.60 euros ($14.31) in late afternoon trading in Frankfurt.
Dieter Rampl, 55, who heads the corporate customers and markets division, was named to replace CEO Albrecht Schmidt, 64, on Jan 1. Schmidt is approaching mandatory retirement age.
HVB said in a statement that earnings were ``marked by underling economic conditions, which have deteriorated further, an expansion of the wave of insolvencies and an unexpectedly strong level of price deterioration on the capital markets.″
Income from interest, trading securities and commissions all fell, while money set aside for bad loans nearly doubled to 2.48 billion euros ($2.43 billion) in the first nine months from 1.34 billion in the same period of 2001.
Germany’s big banks have been rocked by sharp drops in financial markets and by the failures of thousands of mid-sized business customers and several of the country’s biggest companies, such as construction firm Philipp Holzmann, media group Kirch and aircraft maker Fairchild Dornier.
The bank said outgoing CEO Schmidt will become chairman of the board of directors. The current board chairman, Kurt Viermetz, is to become deputy board chairman.