The German financial institution Volksbank Kleverland has become a case requiring support.
Another cooperative bank needs assistance from the sector's security institution. It has to make loan write-downs that it cannot "bear on its own".
Frankfurt. With Volksbank Kleverland, there is another support case in the cooperative financial group. The bank has applied for support assistance from the security institution of the industry association BVR, a spokesman for the bank announced. "The granting of the corresponding guarantees ensures that Volksbank Kleverland does not have to draw on its own precautionary reserves," the spokesman said.
He did not provide any information on the amount of guarantees required. The "Rheinische Post" was the first to report on this.
In a letter to the representatives, which is available to the Handelsblatt, it is stated that a "significant need for value adjustments" has been identified for some loans. The bank cannot bear this need for value adjustments on its own without foreseeable undershooting of the regulatory capital requirements. Most recently, several Volks- and Raiffeisenbanken had to be rescued by the BVR support fund. They had gotten into difficulties through partly very risky transactions.
In the past two and a half years, the security institution of the Federal Association of Volks- and Raiffeisenbanken (BVR) has supported five banks with guarantees and grants totaling €1.5 billion. With Volksbank Braunschweig Wolfsburg, another bank is likely to need assistance soon.
Translated by urgent.news from Handelsblatt's report; automated translation may contain errors. Machine-written — it may contain errors, so check the original before relying on it.