Frankfurt: Commerzbank, Germany's second-biggest lender, raised its stake in Bank Forum to almost 90 per cent, paving the way for a potential capital increase at the Ukrainian lender.
The transaction comes just days after Commerzbank participated in a capital increase at Polish unit BRE Bank and amid signs that writedowns on bad debt are still on the rise in eastern Europe.
Commerzbank Thursday said it had bought a 26.25 per cent stake in Bank Forum, but declined to disclose financial details.
The stake in Bank Forum, which was formerly owned by Leonid Yurushev, was bought as part of an asset swap, a person familiar with the transaction said.
The deal raises Commerzbank's stake above the 75 per cent threshold needed to push through a capital increase.
Commerzbank said Yurushev had left the group of shareholders in Bank Forum.
Bolstering capital
At a Bank Forum extraordinary meeting in 2009, shareholders discussed a capital increase and ways to bolster the bank's capital position. Bank Forum made a loss in 2008. The bank has not yet published 2009 earnings.
Bank Forum, in which Commerzbank has held a stake of just over 60 per cent since March 2008, has been burdened by its exposure to the struggling Ukrainian economy.
The International Monetary Fund has called on western banks to help solve a debt crisis in eastern Europe.
Commerzbank has said it aims to make a profit from its eastern European operations by 2011 after seeing investments sour after an aggressive expansion into the region.
