WestLB facing fresh Boxclever blow

13 April 2012

WESTLB will have to raise its provision for TV rental firm Boxclever by about £150m, according to reports in Germany.

Financial regulator BaFin is to demand a charge of £500m for the bank's investment, instead of the e500m (£349m) WestLB had indicated, Der Spiegel reported. A bank spokesman dismissed the report as speculation.

The Boxclever deal, a £748m securitisation structured by Robin Saunders' principal finance unit in London, triggered a BaFin probe and led to the resignation of senior bank management. A criminal probe is underway.

The spokesman said the bank was still waiting for BaFin's report on its credit risks, expected by mid-December.

BaFin has criticised WestLB's risk management on Boxclever. The financing helped push the bank to a e1.7bn loss for 2002 when Boxclever's fortunes sagged.

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