WESTLB chief executive Heinz Hilgert resigned yesterday following a disagreement with the German bank’s owners over how to restructure the stricken lender.
The bank did not name an immediate successor for Hilgert, who had been in office since May 2008 and whose resignation was unexpected.
His departure came with the bank in the midst of a restructuring, a vital step to consolidating the stricken German Landesbank sector.
Hilgert said his situation had become untenable after WestLB’s majority shareholder, the regional association of savings banks, declined to back his restructuring proposal.
“I have laid down my role as chief executive and member of the management board of WestLB. I deeply regret this development,” Hilgert said. WestLB needs about €5bn (£4.4bn) of guarantees to help it restructure, Hilgert said.
Dusseldorf-based WestLB is seeking to transfer about €80bn in risky assets off its balance sheet into a special purpose vehicle.
The proposal to offload risky assets such as troubled financial instruments tied to student loans and government bonds, was “not met with sufficient support” among the bank’s owners, Hilgert added.