The troubled German bank IKB, which was saved from bankruptcy with huge amounts of state aid, has received another five billion euros (seven billion dollars) in public loan guarantees, it said on Tuesday. The 36-month guarantee is aimed at allowing IKB to obtain financing and has been approved by the European Commission, a statement said.
IKB, which specialises in loans to small- and medium-sized enterprises, said however that it had "asked for no reapitalisation or assumption by the state of risky assets."
It requested the loan guarantees within the framework of a German plan worth a total 480 billion euros that was established after the US investment bank Lehman Brothers failed in mid September. But IKB has been in trouble ever since the US market for high risk, or subprime, mortgages collapsed in mid 2007. The German state has injected directly or indirectly more than seven billion euros in the bank, which is now owned by the US investment fund Lone Star.
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