More than 1,000 small shareholders attended a general assembly of the bank, a former safe investment now in the midst of a storm that has had to be rescued several times from bankruptcy since August.
IKB shares have lost around 70 percent of their value over the past six months, and are now worth about €4.25, most of its directors have left, and it expects to post a loss of around €800 million ($1.26 billion) for its 2007/2008 fiscal year, which ends on March 31.
IKB, which specializes in loans to small and medium-sized enterprises, was one of the German banks hit hardest when the US market for high risk, or subprime, mortgages collapsed in August.
Supervisory board president Ulrich Hartmann told the assembly that the board had no way of heading off the catastrophe that almost pushed IKB into bankruptcy.
“The crisis broke without warning,” Ulrich Hartmann told the assembly in the western city of Düsseldorf.
“We had no chance of being able to foresee the risks and ward off the crisis,” Hartmann claimed, because the supervisory board had not been told until it was too late how exposed the bank was to the US subprime market.
“Why did you accept that,” one angry shareholder asked to applause from the crowd.
“You took my money,” another said.
The group has benefited from a series of rescue packages put together by the German government and private banks worth around €10 billion so far. German officials have now ordered an outside audit of IKB, in which state-owned development bank KfW has a dominant holding.
On Wednesday, European Central Bank president Jean-Claude Trichet reminded European Union lawmakers in Brussels that central bankers had issued several public warnings a year before the crisis broke that financial markets were underestimating risks.
“I remember myself saying that we have to be prepared – and the message was for the private sector in particular of course – for a market correction,” Trichet said.
“That was visible in the level of spreads, in the level of risk premia in the level of volatility that was observed in a large number of markets,” he pointed out.
Back in Duesseldorf, IKB sharehoders rejected a management request for a vote of confidence.
“They are completely incompetent,” said shareholder Dieter Eisele, including the government, the central bank and regulatory authorities among those who he said bore responsibility for the debacle.
Shareholders were also asked to approve a capital increase of €1.5 billion, to which KfW has already said it will sign on, increasing its stake from 43 percent at present to around 90 percent.
KfW wants to sell its holding at some point, but is likely to find it hard at the moment.
“Does IKB have a chance to survive,” a small shareholder wondered. “It should be shut down. It should be placed in bankruptcy, properly.”