Commerzbank to return state funds
Wednesday, 9 September 2009 13:15Commerzbank is returning billions of euro in German state guarantees and will no longer issue state-backed bonds.
Of a total €15 billion in available government guarantees, Commerzbank returned €5 billion in August and it will return another €5 billion.
'From now on, we won't issue further state-guaranteed bonds,' the company's chief executive Martin Blessing told a banking conference in Frankfurt.
The German state currently owns 25% of the shares in Commerzbank owing to financial aid provided by Berlin to help the bank survive the global financial crisis and acquire the troubled Dresdner Bank.
In addition to the loan guarantees, Germany gave Commerzbank €18.2 billion in cash through a capital injection and the purchase of two silent participations of its equity.
The German government does not therefore exercise voting rights commensurate with its stake.
Commerzbank used guarantees worth €5 billion for a bond issue early this year when conditions on financial markets were in dire straits.
Mr Blessing said today that the bank planned to begin paying back the state starting in 2012.
