Helaba has put a new debt distribution structure in place to support the bank’s drive to syndicate a quarter of its loans, Real Estate Capital has learned.
As part of the changes Norbert Kellner becomes head of a single, combined distribution desk and Shan Jiang has been recruited from Industrial and Commercial Bank of China.
Helaba’s combined real estate syndication team now covers both the German domestic and international markets and also incorporates the sales management unit. Kellner is moving back to Frankfurt from London where he previously headed the international, ex-German distribution business. He will report to real estate board member Juergen Fenk.
The German bank is also dividing its distribution partners into two: savings banks; and third-party banks and debt investors. Wolfgang Hild, who previously ran the team for German distribution has responsibility for savings banks clients and reports to Kellner.
In London, Shan Jiang joins next month to work with Nicola Bayes and Jan Bleyder. He had worked at ICBC for two years, and before that was at Barclays.
Kellner said: “Three-four years ago we only did bilateral balance sheet lending. We had a very good year in 2015 and did about €1bn of syndication in Europe and we want to double that by 2018.” Last year the bank wrote €9.8 billion of new real estate business.
The bank expects the share of new loans taken by savings banks – which typically take smaller tickets – to grow from about €100 million of participations last year to €200 million this year. “But by 2018 we plan to be doing €2bn of distribution a year and to syndicate 1/3 of that to savings banks,” he said.
“The savings banks are getting more and more important to us. Our ownership structure means we’re linked closely and they are keen on participating in the real estate loans we create.” The bank is investing in a standard process and IT systems to support them.
Kellner said that as well as looking at all new big ticket size loans to decide to what extent the bank will bring in other banks and investors, Helaba “wants to further develop its loan portfolio management, looking at how we grow and how we allocate equity resources.”
Regulatory changes, and particularly allocating capital under risk-weighting rules, is increasingly driving European banks’ move away from a pure balance sheet model. Most German banks use their own ‘Advanced Internal Risk Based’ (A-IRB) model but under recent Basel committee proposals these may be replaced by a standard version, akin to the slotting regime governing UK banks.
Andrew Day, head of the five-strong real estate finance team at ICBC, said that Jiang will be replaced. After launching in the UK in 2013, the bank has built up a book of 20 loans in Europe, most recently taking a 50 percent participation in Lloyds’ £185 million loan to Anschultz Entertainment Group and Crosstree Real Estate Partners secured on London venue The O2.
Lloyds is one of the European banks which used to be balance sheet only, but has been in the vanguard of moving to a new model incorporating more distribution. In 2015 the UK bank distributed £1.9 billion of the £9 billion new loans it wrote.