WestLB's financing put the wheels back on Formula One

The bank, owned by the state of North Rhine-Westphalia, reported a pre-tax loss of 1.67bn euros ($1.94bn; �1.19bn) after in February saying it expected a loss of 1bn euros.

The difference was because the London-based structured finance unit needed hundreds of millions more euros than previously thought for providing against risks, the bank said.

The high-profile London team, led by American-born banker Robin Saunders, has been involved in refinancing Bernie Ecclestone's Formula One, financing the rebuilding of Wembley stadium and backing entrepreneur Philip Green's bids for Arcadia, BHS and Safeway.

It also received substantial publicity over unsuccessful - critics say unrealistic - approaches to take over Railtrack and buy BT's fixed-line telephone network.

Too aggressive?

The bank did not identify the specific projects that had necessitated the increase in risk provisions but, speaking at a news conference, chief executive Juergen Sengera did not deny reports that problems in the financing of television rental business Boxclever - formerly Radio Rentals - were at the root of the issue.

When asked about his support for Ms Saunders, Mr Sengera said: "There I think we should be fair to all and we should also wait for the result of the investigation there and then we will make a statement."

Critics have said Ms Saunders' team has been prepared routinely to take on levels of risk that other banks have not and loaded bought or refinanced firms with too much debt.

They also say the team has yet to convince with its "exit strategy" for investments.

'Mounting concerns'

Some suggested the Boxclever deal might have faltered because financing for the buyout had been securitised against a customer base that subsequently contracted sharply.

Neither Boxclever nor Ms Saunders were available on Friday for comment.