IKB Industrie Bank, one of many hit by the US crisis

The IKB Industrie Bank, one of many hit by the US crisis, announced Thursday, March 20, that it had failed to recover from the effects on its investments in the United States and that its future reported losses would be greater than previously anticipated.As a result of the announcement, German stock market operator Deutsche Boerse suspended trading in IKB shares after the bank revealed that it did not expect to post a significant profit for the foreseeable future.
Trading was suspended after the shares had fallen 2.6 percent to 4.93 euros following a press report which said the company had been forced to suspend an auction of risky assets.
The business daily Handelsblatt had said earlier in the day that an auction of most of IKB's three-billion-euro ($4.7 billion) portfolio of risky securities had been suspended due to a lack of satisfactory bids, which might lead to further write-downs at IKB. The Dusseldorf-based bank later confirmed it had been forced to write down the value of more of its assets.Huge losses despite government bail-out
IKB, which primarily offers long-term financing to small- and medium-sized German companies, said losses would total 800 million euros over the financial year to March 2008, up from a maximum of 700 million euros previously made public.
Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Everything is gray for the IKB Bank
Last month, the German government -- which owns a 38-percent stake through the KfW, a state-owned bank set up after World War II to help fund reconstruction -- stepped in to prop up the ailing IKB, putting up one billion euros of a 1.5-billion-euro rescue package to prevent the crisis spreading to the rest of the country's banking sector.It also included a 450-million-euro buffer for further write-downs, an amount which may now prove insufficient, Handelsblatt said in its report.The KfW twice plugged the gaps at IKB last year and was expected to do so again following the announcement of further losses.
One Frankfurt trader said he had totally written off IKB. "The bank is dead and as I mention on each and any occasion, it has seen further problems; the bank is not worth a dime," he said in an interview with AFP news agency.
A second trader added that only the very brave were investing in IKB at the moment and that he would recommend others to stay well clear.