WestLB AG

THE SCOOP


Shifting structures


The "LB" in WestLB"'s name stands for Landesbank, a term used to describe a particular class of regional wholesale banks owned by the German government. WestLB was established in 1969 by the merger of Münster-based Landesbank für Westfalen Girozentrale and Düsseldorf's Rheinische Girozentrale und Provinzialbank, both of which had been operating since the mid-1800s; in 2002, the firm was converted into a joint stock company, though it is still partially owned by the government of North Rhine-Westphalia. After 2005, the bank began operating without state liability guarantees.


WestLB also serves as a central bank for the Sparkassen, or regional savings banks, of North Rhine-Westphalia and Brandenburg. Further afield, the bank serves multinational corporate clients, mid-cap companies, government agencies and individuals in Europe, Asia and the Americas, providing a full range of corporate finance, asset management, project finance, lending, transaction processing and private banking services. The firm's footprint is largely concentrated in and around Germany, but a handful of offices operate elsewhere around the world, including hubs in London and New York. Meanwhile, the 100-plus Sparkassen operate over 3,000 branches.


For WestLB, the global financial meltdown struck early. Hammered by the 2007 subprime crisis, the bank declared a loss of €1.6 billion heading in to 2008, with write-downs totaling €2 billion. The government of North Rhine-Westphalia asserted its authority and shifted €23 billion of bad loans toxic assets from WestLB's balance sheet to a special purpose vehicle (SPV) called Phoenix, a move dubbed "ring-fencing." At the same time, the state offered to underwrite €5 billion in losses. These efforts gave WestLB some stability, but also opened new lines of commitment to the state-and calls for restructuring. In early 2008, as talks among the bank, the government and EU regulators got underway, WestLB began cutting several hundred jobs in Germany and abroad.


Mid-cap pros


In 2008, WestLB refocused, ramping up its services for mid-cap clients and expanding its range to companies with annual sales of €50 million and up. According to the firm, it gained some 280 new mid-cap clients by the end of fiscal year 2008. This made sense: mid-cap companies employ 70 per cent of the workforce in North Rhine-Westphalia and are a significant chunk of Germany's overall economy. German mid-caps are also becoming increasingly important in neighbouring markets, and WestLB has been able to leverage its relationships with the regional Sparkassen to promote and execute services.


The bank even created proM, a specific range of products for its mid-cap clients. This lineup includes products that cover asset securitization, equity and debt finance, long-term finance and security for unsettled claims.

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WestLB AG


Herzogstra_e 15
Düsseldorf 40217
Fax: 49 211 826 01
49 211 826 6119

STATS


  • Employer Type: Private
  • Chairman: Heinz Hilgert
  • 2007 Employees: 6,477

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