Frankfurt The Hamburg Commercial Bank (HCOB), which emerged from HSH Nordbank, may face an additional downsizing. "I'm worried about the German economy," said CEO Stefan Ermisch on Tuesday evening before the International Club Frankfurter Wirtschaftsjournalisten (ICFW).
When the former Landesbank announced that it had halved its jobs, it still assumed economic growth in Germany, now it is afraid of a recession. "Therefore, from my point of view, it is very logical that we have to deal intensively with whether we have to do any more homework," said Ermisch on the question of additional job cuts. The HCOB had sealed the dismantling of nearly half of the jobs in the spring. The number of full-time employees is expected to decline from 1716 at the end of 2018 to around 950 to 2022.
Hamburg and Schleswig-Holstein had rescued HSH Nordbank in the ship and financial crisis with billions in aid. Under pressure from the EU, they sold the bank for about one billion euros to financial investors around Cerberus and JC Flowers.
Now the institute is to be smaller and increase its return to over eight percent before taxes. "We will achieve our goals," Ermisch said, reiterating the forecast that the bank will write a slight pre-tax profit this year. The bank also benefits from the sharp drop in refinancing costs.
After privatization, the former Landesbank focuses on commercial real estate financing, ship loans, project finance and certain areas of corporate finance. In these niches one can live quite well in the current environment, said Ermisch. "In new business, we have returns that are just under double digits."
However, as the HCOB expects the economic downturn in Germany to continue for about 18 months, the bank is slowing down lending in the more cyclical areas, such as real estate project developments and retail real estate.
"We take every euro out"
"We are becoming more cautious and are clearly tightening credit standards," Ermisch said. He also turns on the cost screw. "We take out every euro that we can take out." Thus the bank wants to successfully hibernate in order to be able to benefit from the weakness of the competition after the economic downturn. "I want to be in a comfortable position to take advantage of opportunities," Ermisch said.
In 2021, the former Landesbank is to switch from the institutional protection of public-law banks to the liability system of private banks. According to Ermisch, the HCOB must have a core Tier 1 capital ratio of more than 16 percent and a return of 8 percent before taxes.
In addition, no major risks must lie in the balance sheet. That wants to make the bank clean. "I do everything to increase capitalization," Ermisch said. At the end of June, the Common Equity Tier 1 ratio was 17 percent. By contrast, there are no more conditions imposed by the EU. "The EU procedure is finally over."
More: Martin Zielke, CEO of Commerzbank, has a cooperation with the public sector. The savings bank president rejects the project so far.
(TagToTranslate) HSH Nordbank (t) Hamburg Commercial Bank (t) Recession (t) Ermisch (t) Economy (t) Job losses (t) Rationalization and rehabilitation (t) Cerberus (t) Flowers (t) Stefan Ermisch (t) Savings Banks (t) Banks & Credit Institutions