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Deutsche Bank Chief Reiterates Refusal of State Support

DPA news agency (sms)November 2, 2008

Deutsche Bank chief Josef Ackermann said Sunday, Nov. 2, that Germany's biggest bank has no plans to take advantage of a government rescue plan for its troubled financial sector.

Ackermann has said he would be ashamed to take the state's aidImage: AP

"Under the current circumstances we will not participate, because we are strong," said Ackermann, whose bank last week reported a third quarter profit in spite of the current economic turmoil.

The German bailout package, approved by parliament last month, involves 480 billion euros ($611 billion) in debt guarantees and funds for injections of capital and purchases of illiquid assets.

On Saturday, German Chancellor Angela Merkel appealed to banks to take up the government's offer as quickly as possible.

Deutsche doing fine

Ackermann welcomed Berlin's quick response to the financial crisis, but said Deutsche Bank had made money during a difficult period and did not need the help of a state-backed program.

"We need a stable financial system," he said in an interview with German public broadcaster ZDF. "And those banks that are weaker should be strengthened as quickly as possible."

Compared with several of its peers, Deutsche Bank has escaped relatively unscathed from the global credit crunch and the financial market crisis.

Last week the bank said its net profit in the three months to the end of September came in at 414 million euros after taking advantage of new accounting rules that enabled it to reduce its writedowns.

A German state bank BayernLB, which reportedly needs 6.4 billion euros in new funds, has asked for help, as has Hypo Real Estate (HRE), which nearly collapsed in September.

Germany's first big casualty of the current crisis, HRE won 50 billion euros in guarantees from the government and German banks in early October. Last week it applied for a cash injection of 15 billion euros from the new federal fund.

Media reports said two other state banks, WestLB and HSH Nordbank, were considering applying for funds from the government bailout scheme.