DDP IKB has become the first German bank to demand money back from its former managers.

The private German lending bank IKB has demanded hundreds of thousands of euros from four top managers it fired in 2007 after the first wave of the credit crisis brought the bank to its knees, according to thenewspaper. It's the first call by a German financial institution for restitution from its former employees.

IKB's former chief executive, Stefan Ortseifen, has been asked to return 805,000 ($1 million) in bonus pay, while three other ex-managers -- Volker Doberanzke, Markus Guthoff and Joachim Neupel -- have been asked to repay amounts in the range of half a million euros each. IKB said it had started to withhold Neupel's pension payments in May 2008 to settle his debt, and Neupel has sued for the pension money to be released. Former CEO Ortseifen has sued IKB for firing him.

Another manager who still works for IKB, Claus Momburg, has already returned 558,000 in bonus pay, according to the Süddeutsche Zeitung. The bank reached a settlement with a sixth manager, Frank Braunsfeld, who left the bank last year.

IKB said the bonuses in question were "payments dependent on performance" for the business year 2006-2007, when failed speculations cost the bank billions of euros and nearly caused it to collapse in mid-2007. The bad investments were later found to be the result of mismanagement.

IKB was saved from collapse with the aid of a 9 billion package arranged by the German government, and a subsequent fire-sale purchase by the American investment group Lone Star.

Regional Banks Step Up to the Trough

Meanwhile two more beleagured regional state-owned banks in Germany hinted that they might accept help from a federal fund set up by German Chancellor Angela Merkel. German broadcaster NDR said Thursday that two state-owned banks -- WestLB in North Rhine-Westphalia, and HSH Nordbank in Schleswig-Holstein -- may ask for money from Berlin.

"The (federal) initiative offers a chance to strengthen WestLB," a spokesman for the Westphalian bank admitted on Wednesday evening.

The announcement follows news on Wednesday that BayernLB, a Bavarian state-owned bank, would be the first German regional lender to accept money from the fund, accepting 5.4 billion in aid. WestLB and HSH Nordbank may now follow its lead -- although a firm decision might not come before the weekend, according to the NDR report.

As late as Tuesday, BayernLB was refusing Berlin's help, saying the money would give the federal government too much influence over its business.

Other banks around Germany, like LBBW in Baden-Württemberg, still insist they need no outside help. The idea behind the federal fund is to encourage the state banks to continue lending to each other in spite of tight credit conditions around the world.

msm -- with wire reports.