Thursday, August 22, 2019
Norddeutsche Landesbank has lost billions due to the difficult business of ship financing. Actually, the institute wants to implement its capital measures to strengthen its balance sheet as early as the third quarter. But there is no green light from Brussels.
The rescue of ailing Norddeutsche Landesbank (NordLB) with an agreed billion-cash injection is delayed. As reported by the institute in Hanover, the implementation of the capital measures planned for the third quarter so far can only take place in the 4th quarter of this year.
Among other things, the institute justified the delays with the pending approval of the European Commission. Also, the state parliaments of NordLB's main owners Niedersachsen and co-owner Saxony-Anhalt would have to approve the plans. There was also talk of "complexity of the procedure and interdependencies".
Implementation only in the 4th quarter
NordLB had lost billions due to the difficult business of ship financing and needed around 3.63 billion euros. Lower Saxony wants to pay a large part of the cash injection. Saxony-Anhalt wants to borrow for its share of 198 million euros. The savings bank group should shoulder the rest.
The banking supervisor had set a deadline according to which the capital injection must have arrived at the beginning of September. However, the participants wanted to wait for the decision of the EU Commission, whether the rescue by the countries and the savings bank group is compatible with European competition law.
The corresponding state treaty must also be dealt with by the state parliaments and obtained the consent of the deputies. Before, no money flows. The NordLB was due to the delay "with the relevant supervisory authorities in constant close exchange". In view of the progress achieved in the realignment of NordLB, the Management Board assumes that the capital injection and implementation of further capital measures will take place in the fourth quarter.
Banking supervision insists on higher capital ratios
In future, the business model of the newly established NordLB will focus on corporate banking, specialist financing such as renewable energies, real estate financing, capital market business and retail banking. The number of employees is to be reduced from 5500 to then 2800 to 3000 full-time jobs in the next five years.
The banking supervisor insists that the currently under-capitalized bank regains a higher capital ratio as soon as possible. NordLB has now stated that the implementation of capital strengthening and reorientation measures would "significantly increase the capital ratios currently below regulatory minimums".
. (TagsToTranslate) Economy (t) Nord / LB (t) Banks (t) Financial Markets