Bloomberg News

HSH Nordbank Forecasts 2012 Profit After Loss on Reorganization

March 23, 2012

HSH Nordbank AG, the Hamburg-based regional bank bailed out during the global financial crisis, forecast a return to profit this year after reporting a net loss in 2011 on costs tied to its reorganization.

The loss of 257 million euros ($341 million) compared with a profit of 53 million euros a year earlier, the company said in a statement handed out at a press conference in Hamburg today. The forecast profit for 2012 will be followed by a “gradual” further improvement in earnings, HSH Nordbank said.

The German states of Hamburg and Schleswig-Holstein, which control more than 80 percent of HSH Nordbank, and Germany’s Soffin bank-rescue fund had to bail out the bank during the financial crisis. HSH Nordbank, which plans to cut more than 1,100 jobs by 2014, is exiting operations such as airplane and international real-estate financing and closing international offices to gain approval for the state aid.

“The future prospects for HSH Nordbank are very good, following the successful comeback as a ‘bank for business,’” Chief Executive Officer Paul Lerbinger said in the statement.

Expenses tied to state guarantees and to reorganizing the lender totalled 1.12 billion euros last year, compared with a total of 528 million euros a year earlier, HSH Nordbank said.

The bank, which intends to reduce total assets at its so- called core business to 82 billion euros by 2014, forecasts cutting the size of its shipping assets to 15 billion euros by then, compared with 19 billion euros at the end of 2011. It plans to increase its business with corporate and private clients and expand in financing German real estate, energy and infrastructure.

To contact the reporter on this story: Niklas Magnusson in Hamburg at nmagnusson1@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net


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