US private equity firm Lone Star is to take over German lender IKB Deutsche Industriebank, according to KfW, the German firm's biggest shareholder.
State development bank KfW is set to give greater details soon of its plan to sell its 90.8% stake in IKB.
IKB was one of the first firms in Europe to be a casualty of the fallout from the US sub-prime crisis.
KfW and other firms intervened to stop IKB from going bankrupt in a rescue package worth several billion euros.
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Like other banks, IKB invested in financial products backed by mortgages given to US homeowners with poor credit histories.
Once interest rates rose, many borrowers were unable to meet their monthly payments, thereby defaulting on their loans.
A news conference later on Thursday is expected to give more details of the sale.
Lone Star - which manages more than $13bn in assets - is reported to have beaten off competition from Swedish bank SEB and fellow US private equity group Ripplewood.
(BBC)
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