IKB Deutsche Industriebank AG, a German lender that invested in U.S. subprime mortgages, said its profit will be “significantly” lower than forecast as fallout from the deteriorating North American home-loan market spreads.
“IKB is no longer in a position to maintain its earnings forecast of 280 million euros ($382 million),” the Dusseldorf- based bank said in a statement distributed on the DGAP newswire. Chief Executive Officer Stefan Ortseifen resigned and will be replaced by Guenther Braeunig, the statement said.
Shares of IKB have fallen 18 percent this month on anticipation the company would be hurt by the subprime market. Up to 40 companies worldwide are suffering from delinquencies on U.S. home loans to people with poor credit while concern defaults will increase sparked a $2.1 trillion rout in global stock markets last week.
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