Another German financial group fell victim to the US subprime mortgage crisis yesterday when DZ Bank, the country’s fifth-largest, revealed a writedown of more than €1.3bn ($2bn) in its securities portfolio and warned that 2008 would be a volatile year. Financial Times
The write-downs by DZ spread the effects of the crunch into Germany’s co-operative banking sector. DZ acts as a central bank to most of the sector, which is a significant force in German banking with about a fifth of the domestic market for retail and small business customers.
DZ’s warning came as WestLB, the Dusseldorf-based public sector bank seeking a merger partner after being affected by the fallout from risky investments, was rebuffed by the biggest shareholder in Helaba, its Frankfurt-based counterpart.