IKB Deutsche Industriebank saw a net loss of euro540 million ($739.80) in its fiscal first quarter, but said a government rescue package had helped it stabilize.
The Duesseldorf-based bank, which has reported heavy losses from the effects of the sub-prime mortgage crisis, said it saw a 14-percent reduction in net interest income for the April 1 to June 30 period to euro121.2 million ($166.04) from euro140.8 million ($129.90 million) in the same period a year ago.
In February, German Economy Minister Michael Glos, said the German government would provide $1.5 billion to help bail out the IKB.
In terms of an outlook for the rest of the year, IKB said its net assets and financial position have been stabilized as a result of the rescue package.
"The continued development of IKB depends to a large extent on its ability to obtain adequate refinancing," IKB said in a statement issued late Wednesday.
"In addition to the capital increase, a prerequisite for this is that the capital markets, and confidence in banks in general, must return to normal." IKB said it saw largely flat or lower operating income among its segments.
Corporate clients generated euro23 million ($31.51 million) in operating income, up slightly from the euro21 million a year ago.
Real estate operating income was down to euro6 million ($8.22 million) from the euro9 million a year ago, while structured finance was flat at euro21 million, ($28 million).
IKB said provisions for possible loan losses remained essentially unchanged year-on-year at euro25 million ($34.25 million).
The bank said the provisions were lower than in other quarters of the previous year.
"The Group result is still dominated by the crisis situation at the bank and the turbulent financial market environment," IKB said.
Shares of IKB were trading up 19 percent at euro1.46 ($2) in Frankfurt morning trading.