If it wasn't for all those losses, we would have been profitable...

Last week, the other Bavarian basket-case bank, Bayern LB, also came out with high-level financials.

Let's see:

Bayern LB lost a cool 5.1 bn € in 2008.

But hey, the business is fundamentally sound, because "excluding direct impact of financial crisis", the bank would have made an operating profit of 0.3 bn €

In other words,

1. if the bank had not had a "crisis-related impact on the trading result" of -2.1 bn €,

2. if it had avoided 1.9 bn € "crisis-related losses on investments",

3. if it had not suffered Lehman-related write-downs of 0.5 bn €,

4. if it had not experienced Iceland-related write-downs of 0.9 bn €,

hey, if all of that had not happened, the bank would have posted a tiny little operating profit, and a pre-tax RoE of 1 %!

One thing the results presentation doesn't mention:

Bayern LB has its very own M&A disaster, the acquisition of Hypo Alpe Adria Group in mid-2007 (Bayern LB's current stake: 67 %). Apparently, HAAG accounts for 500 m € of Bayern LB's 2008 loan loss provisions, and according to the FTD, HAAG posted a full-year loss of roughly 500 m € as well. Not sure where FTD got the 2008 loss figure, it isn't on the HAAG website. However, the 6/08 interim results (finalized in August 2008) inform us that the bank is confident to achieve a "small profit" for the year 2008. Imagine that: HAAG had lost 64 m € in the first half, but in August 2008, with the financial world collapsing all around them, they still merrily assumed a second-half profit of 100 m € or so