Hamburg Commercial Bank, Germany’s first privatised Landesbank, is reportedly looking to buy rival banks as the country’s banking space is ripe for consolidation.
With war chest of €2bn, the lender is particularly interested in acquiring specialised lenders who focus on leasing, the Financial Times has reported.
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In an interview to the FT, the bank’s chief executive Stefan Ermisch said that consolidation among German banks will become a more pressing topic in the near future and this will offer plenty of opportunity for the bank.
Hamburg Commercial Bank, which specialises in funding commercial real estate, shipping and infrastructure projects, is said to have €34bn in total assets.
However, Ermisch refused to discuss potential targets.
The bank operated as HSH Nordbank before it was acquired by a consortium led by US private equity groups Cerberus and JC Flowers in 2018.
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By GlobalDataThe German states of Hamburg and Schleswig-Holstein, which rescued the lender from insolvency in a €13bn bailout in 2009, sold the bank in a €1bn deal to the buyout firms.
Hence, this intent to go for acquisition represents a notable turnround for Hamburg Commercial.
The improved performance, combined with a fortified balance sheet, had put the lender on track to take the final step of its privatisation and join the deposit insurance scheme used by private banks, Ermisch was further quoted by the publication as saying.
The bank, tor the moment, remains part of German public banks’ institutional protection scheme.
The Association of German Banks refused to offer comment on the transition.
Last year, the bank’s common equity tier one ratio surged to 27% of risk weighted assets from 18.5%, which is more than twice the minimum required by banking watchdogs.
Ermisch added that he don’t want to keep the bank’s equity ratio at such an ‘elevated level’ over the long term and instead use the money to buy rival lenders.
“This gives us a lot flexibility to play to our strengths in the consolidation wave that will start once the current downturn has ended, whenever this will be,” Ermisch added.
The bank’s non-performing loans stood at €624m, which is less than 2% of its overall credit exposure.
