German State Mulls Sale of WestLB Stake

The new regional government of the state of North Rhine-Westphalia indicated on Wednesday that it did not rule out a possible sale of its 25.4-percent stake in the public-sector banking giant WestLB. "A privatization (of WestLB) will be possible," the regional branch of the liberal FDP party said in statement published on its website following coalition talks with the Christian Union CDU party in the North Rhine-Westphalia. "We want to make best use of the state's share in WestLB. That includes a sale via the capital markets," regional FDP chief Andreas Pinkwart said. The CDU and FDP parties won last month's regional elections in North Rhine-Westphalia, Germany's most populous state and formerly a stronghold of the Social Democrat SPD party. The two parties are currently in coalition talks. A possible sale of a stake in WestLB to a private-sector bank would constitute a first in Germany, where the strict division between public-sector and private-sector banks has led to a highly fragmented banking sector and put the brakes on much needed restructuring. The bank booked net loss of 1.16 billion euros ($1.4 billion) in 2004 after 1.9 billion euros in 2003 and 1.73 billion euros in 2002.