The decline was due to losses in proprietary trading activities involving spread positions from ordinary and preferred shares, in particular the measures taken to reduce these positions as well as risk.
The overall loss amounted to E604 million in the first half of 2007 and this has been included in the result. The net trading loss was limited to E309 million due to the positive performance in other areas. Moreover, net interest income and net fee and commission income in part rose sharply, and administrative expenses fell substantially by E109 million to E803 million.
Alexander Stuhlmann, chairman of the managing board of WestLB, said: Our profit has been severely hit by the losses incurred in our proprietary trading. This is a setback for the bank and masks the fact that we have been successful in other areas of our business. Looking ahead, however, the close and very successful partnership between WestLB and the savings banks, along with the progress we have made in our customer business, give me cause for optimism.
We will play an active role in the planned strategic realignment of WestLB as part of the consolidation of the German Landesbanks. The managing board supports all the efforts being made by our shareholders to find an acceptable long-term solution which is in the interests of the bank, its owners and its employees, as quickly as possible.
