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Berlin (APA / Reuters) – Despite privatization difficulties, HSH Nordbank posted a small pre-tax profit in the first nine months. That was 8 million euros, as the bank announced on Friday. After deduction of taxes, the net result is a consolidated loss of 102 million euros.
Savings, good business performance and clean-up of ship loans fully offset the cost of privatization. For the year 2018, the institute continues to expect a pre-tax loss of approximately 100 million euros. However, this could change as a result of the change of ownership, explained HSH.
"We are on the verge of completing privatization and we expect a very timely closing and we will begin a new era for the bank," said Stefan Ermisch, CEO of HSH. "Our deep transformation into a profitable, sustainable bank will be an immense show of strength."
By the end of February 2018, Hamburg and Schleswig-Holstein had sold their Landesbank for about one billion euros to a consortium led by financial investors Cerberus and J.C.Flowers, under pressure from the European Commission. In order for the agreement to be finalized, the supervisory authorities and the European Commission must give their green light.
More recently, the parties agreed on the details of how HSH could move from the joint and several liability regime of public-law savings funds to the security system of private banks. However, to meet the admission criteria, the bank must become significantly more profitable. Return on equity before tax currently stands at 0.2%, which is less than the required medium-term value of at least 8%. This – and the elimination of certain tasks due to privatization – should also lead to a significant reduction in jobs. According to insiders, the number of full-time jobs could rise from 1,720 in late September to less than 1,300 in the medium term.
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