HSH Nordbank reported strong gains in its corporates business
- Operating profit after risk provisions substantially improved
- Commission income up 43 %
- Pre-tax return on equity rose to 32.5 %
Hamburg/Kiel, February 27, 2007 - HSH Nordbank AG continues on its profitable growth course in the corporate-customer business. On the basis of the figures reported for the 2006 fiscal year, operating profit after risk provisions improved substantially to EUR 399 million (previous year: EUR 261 million). The increase in net interest income to EUR 365 million (previous year: EUR 357 million) benefited from a perceptible rise in capital spending. The growth in net commission income to EUR 181 million (previous year: EUR 127 million) was attributable to strong demand for structured finance in Germany and in Northern Europe. Operating earnings were additionally boosted by the sale of an equity holding, which resulted in a positive risk provisions/evaluation item. The pre-tax return on equity improved from 24.4 percent to 32.5 percent.
“The very good annual result underscores our leading market position as a bank for corporate customers in Northern Germany, which we were able to expand further during the year. Thanks to our clear focus on the requirements of large mid-sized businesses and the firm roots we have in our home market of Northern Germany and our core region of Northern Europe, we expect to see very good opportunities for growth in the future,” explained Bernhard Visker, HSH Nordbank Management Board member responsible for the Corporate Clients segment.
Demand for sophisticated finance solutions is growing Alongside traditional bank loans, there was an increase in demand for innovative forms of finance, such as mezzanine capital. SmartMezzanine provides mid-sized businesses with long-term capital for their capex projects without reducing their equity ratio. The first tranche of SmartMezzanine was securitized at the end of 2006. HSH Nordbank has reported a large number of successfully completed arranger mandates in the structuring of complex transactions, especially for acquisition finance deals. In this context, the Bank has benefited from the increase in corporate mergers in Germany and in Northern Europe. The fact that our main focus is on high-growth sectors such as energy and infrastructure, healthcare, and commodity finance is also reflected in earnings. As a result, the Bank came in second place worldwide in the renewable energies sector with a transaction volume of USD 1.5 billion (Infrastructure Journal Project Finance).
Upbeat guidance for fiscal 2007 Thanks to its good market position and clear focus on mid-sized companies, HSH Nordbank has good opportunities for staying on its growth course again this year. In particular, apart from SmartMezzanine HSH Nordbank will be offering further individually tailored finance products that go beyond the traditional lending business, including a program to finance trade receivables (“SmartFact”) and a borrower’s note program (“SmartEntry”). In future, the Structured Finance subdivision will comprehensively support all of the Bank’s customer segments. The main focus here will be on acquisition, project, export and infrastructure finance.
HSH Nordbank AG is a strong regional bank in Northern Europe with total assets of € 190 billion. Some 4,400 of the bank’s employees provide corporate and high net-worth clients around the globe with premium bank products and services. In its core region of Hamburg and Schleswig-Holstein, it is the market leader in the corporate customer segment. HSH Nordbank is an acknowledged partner of the capital markets and international sector specialist. Its main focus is on transportation and real estate. In fact, HSH Nordbank is the world’s largest provider of ship finance and covers the entire value chain in the transportation segment. In the area of real estate, HSH Nordbank is one of the strongest banks in Germany, acting as a provider of services relating to all aspects of real estate. For more information please visit our website at www.hsh-nordbank.com.
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