Several binding bids for HSH Nordbank – final negotiations starting

  • Ermisch: “Investors with forward view on the Bank”
  • Positive trend of earnings and new business after 9 months
  • Significant progress in reducing legacy assets

Hamburg/Kiel, October 29, 2017 - The federal state owners Hamburg and Schleswig-Holstein say that several binding bids for the entire Bank have been received in due time. Following the indicative bids made in March and June of this year, a crucial milestone on the way to privatisation has thus been reached.

The final sale negotiations are now starting for the federal states. These binding bids demonstrate the forward view of the bidders on the Bank. This applies to the good performance of its operating business, the cost savings it has achieved, and the significantly reduced legacy assets.

“These binding bids take us a big step closer to a successful privatisation solution. In the future, we will support our federal state owners to the best of our ability because we regard this firm investor interest as both an affirmation and an incentive. Our business strategy and restructuring course of the past few years are bearing visible fruits. The Bank is strongly rooted in the metropolitan region of Hamburg with great support from our clients and thus offers a new owner good prospects. We will also be reducing our legacy assets dating back to the years before 2009 to an entirely acceptable degree, thereby keeping our capital ratios at a solid level – something on which we have worked hard,” said Stefan Ermisch, Chief Executive Officer of HSH Nordbank. The federal states will study the bids and engage in the final negotiations; the EU Commission’s decision requires the sale agreements to be signed by 28 February 2018.

Good profit and rise in new business after nine-month expected

Following an increase in Group profit to € 173 million before taxes as at 30 June 2017, initial calculations put pre-tax profit slightly higher as at 30 September. This involves the Core Bank making good progress, especially in its business with corporate clients as well as in the renewable energy and real estate sectors. New business performed encouragingly throughout and rose about ten percent to € 6.4 billion, up from € 5.8 billion in the same period of the previous year. HSH Nordbank plans to release its final nine-month figures on 29 November 2017.

HSH Nordbank has also made significant progress with its accelerated reduction of non-performing legacy exposures dating back to the years before 2009: at the end of 2016, the Non-Core Bank held € 13.6 billion of such exposures. Based on the forecast as updated in August, the amount of non-performing loans in the Non-Core Bank will have been significantly reduced to less than € 8 billion at the end of 2017. According to initial calculations, the reduction targeted for the full year was already nearly achieved on 30 September. The target for this portfolio next year is a figure below € 4 billion. Based on existing loan loss provisions, around 50 percent of this amount will furthermore be covered.

Stefan Ermisch: “From today’s perspective, we shall even be able to beat our stepped-up reduction targets for 2017 thanks to the significant achievements after nine months.”

The information contained in this press release does not constitute an offer for the sale of any type of Hamburg Commercial Bank AG securities. Securities of Hamburg Commercial Bank AG may not be sold in the United States without registration pursuant to US securities legislation, unless such a sale takes place on the basis of relevant exceptional provisions.

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