The chief executive of one of Germany’s biggest banks is pessimistic about the chance of early recovery in the financial sector, believing banks will be affected for another two years by the “ugliest” part of the credit cycle.

Gunter Dunkel, chief executive of NordLB, one of Germany’s seven regionally owned Landesbanken, said 2010 and 2011 would be “very interesting” years, with some of the property and corporate lending risks borne by Landesbanken being “a little underestimated”.