WestLB has set aside €454m ($520m) to cover cases of fraud, which accounts for a quarter of the total risk provisions the state-owned German bank has made on its lending business for the year ending December 2002.

The bank made total risk provisions of €1.95bn in 2002, compared with €566m in 2001. WestLB blamed this on "allowances for credit risks resulting from the weak economy". News reports this week suggested that some investments made by WestLB's principal finance unit, run by Robin Saunders, have hit troubled waters.