HSH Nordbank: updated figures on charges resulting from financial market crisis
Capital increase and bundle of measures a major anchor in unsettled times
Hamburg/Kiel, September 24, 2008 - The worsening of the crisis on the financial markets is prompting HSH Nordbank to provide the public with additional updates on the current performance of its securities portfolio in between the usual reporting dates. The Bank is thus systematically continuing its transparent information policy, even in difficult times.
Since the release of the half-year figures for 2008, further writedowns on the Bank’s securities portfolio have been made. There were prompted by a further decline in the valuations of the securities portfolios as a result of the worsening of the financial market crisis in the U.S. with the 85 billion dollar rescue bid for insurance group AIG, the collapse of the third-largest investment bank Lehman Brothers, the takeover of Merrill Lynch by Bank of America and the merger efforts of Morgan Stanley. As of the reporting date on July 1, 2008, the charges now add up to EUR 500 million. This amount includes around EUR 120 million in writedowns on the Lehman exposure.
In the first half HSH Nordbank charged writedowns totaling EUR 511 million to the income statement and nevertheless generated consolidated net income of EUR 129 million.
It should be noted that these writedowns are not to be confused with losses. The writedowns are based on the current market prices of the securities portfolios. If the markets recover, there is considerable potential for an increase in value.
However, due to the persistent uncertainty it is at present impossible to make a serious forecast of the future trend of financial stocks. This also means that there is no longer a basis that would allow a calculation of the impact on HSH Nordbank's income statement. For this reason, the Bank has decided not to issue any further earnings forecasts for the current fiscal year.
Despite the turbulence on the financial markets, HSH Nordbank’s business model has proved robust. In the first six months the Bank generated stable operating income of EUR 1.1 billion after adjusting for the impact of the crisis.
With the recent EUR 2 billion capital measures and the bundle of measures that has already been made public and is designed to increase the Bank’s financial clout, HSH Nordbank considers itself well-equipped to focus its business model further. Even during the present difficult times the Bank is seeking to defend its excellent position as a regional bank for corporate clients with a market penetration of 50 percent in Hamburg and Schleswig-Holstein. The same goes for its outstanding position in its international business segments of shipping, transportation, energy and real estate.
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.
This press information can contain forward-looking statements. These statements are based on our beliefs and assumptions, on information currently available to us which we consider reliable. Forward-looking statements include all statements which are not historical facts, including information concerning future growth prospects and future economic developments.
Such forward-looking statements are based on assumptions relating to future events and are subject to uncertainties, risks and other factors, a large number we cannot influence. Thus actual events can differ considerably from the forward-looking statements made. We make no warranty for the correctness or completeness of these statements or the actual occurrence of the statements made. Furthermore, we assume no obligation for updating the forward-looking statements after this information has been published.