Sept. 7 (Bloomberg) -- HSBC Trinkaus & Burkhardt AG, the German bank controlled by HSBC Holdings Plc, would consider buying IKB Deutsche Industriebank AG after a government-sponsored bailout following losses in the U.S. subprime mortgage market.
``IKB, reduced to its core of classical long-term corporate lending, is interesting,'' HSBC Trinkaus head Andreas Schmitz said in an interview in Frankfurt yesterday. Both lenders are based in Dusseldorf, offering ``certain synergies,'' he said.
IKB, which lends to German companies with more than 10 million euros ($13.7 million) in annual sales, said on Sept. 3 it will post a loss of as much as 700 million euros in the current fiscal year and will curtail investments in the international securities funded by commercial paper that drove it to a near- default. German Finance Minister Peer Steinbrueck said the government is open to selling shares it owns through KfW Group.
KfW, which owns 38 percent of IKB, replaced the company's chief executive and chief financial officers with its own managers. It agreed with German banking associations to cover as much as 3.5 billion euros of potential losses at IKB and its Rhineland Funding Capital Corp. affiliate.
It also assumed IKB's funding obligations to Rhineland, which invests in and sells short-term debt backed by assets including subprime mortgages, totaling 8.1 billion euros. Home loans are going bad at the highest rate in 10 years.
DZ Bank Interested
IKB shares have fallen 48 percent since the end of June, cutting the company's market value to 1.21 billion euros. The stock fell 1.7 percent to 13.75 euros in Frankfurt trading. The 65-member Bloomberg Europe Banks and Financial Services Index declined 2.9 percent.
DZ Bank AG, Germany's largest cooperative lender, also would be interested in buying IKB to attract mid-sized corporate clients, CEO Wolfgang Kirsch said at a banking conference in Frankfurt this week.
HSBC Trinkaus would consider acquisitions in institutional asset management and private banking in Germany, Schmitz said. The bank currently employs around 2,000 people in the country.
London-based HSBC, the U.K.'s biggest bank, this week agreed to pay about $6.3 billion for control of Korea Exchange Bank in the company's largest acquisition in Asia.
HSBC owns 78.6 percent of HSBC Trinkaus. Landesbank Baden- Wuerttemberg has a 20.3 percent stake. LBBW, Germany's biggest state-owned bank, has said it wants to acquire WestLB AG, Germany's third-largest state-owned bank.
Schmitz ruled out a takeover of WestLB, whose trading business is being probed by regulators and prosecutors. WestLB is ``a bank without clients and a duplication in investment banking wouldn't advance us,'' he said.
