HSH Nordbank has boosted real estate lending by 26% to €2.9bn, according to its results for the first half of 2015.
The German landesbank’s property lending helped grow overall new business by almost 10% to €4.9bn, compared to the same period last year.
HSH Nordbank, which is also a big lender to the shipping industry, had to withdraw from most real estate lending, including all lending outside its domestic market, after it suffered heavy losses during the financial crisis. It had to seek support from its shareholders, the state of Schleswig-Holstein and the city of Hamburg, and is still paying off bail-out funding.
Recently the bank has been a more active lender to the German property market. In June, it provided a three-year facility with a loan-to-value of 80% to Sunrise Properties for its Sunrise portfolio of German retail assets. Sunrise, which is owned by the co-founders of CR Investment Management and backed by Swiss-based Helvetic Financial Services, bought the portfolio for €360m in December.
In July, it provided an €82m, five-year facility to Orion Capital Managers for the purchase and refurbishment of the Lilien-Carré shopping centre near Frankfurt. In May, it financed Tristan Capital’s and FREO Group’s €110m joint purchase of the Barthonia Forum in Cologne with a €91m, five-year loan.
It processed €11.7bn worth of property loans in the first half of 2015 with offices making up 35%, residential 27% and retail 23%. About 85% of the loans were made on German assets.
In the half-year results, HSH Nordbank said its shipping finance was steady at €0.7bn but corporate client lending, which includes energy and infrastructure, was down 13% to €1.3bn compared to the same period last year.
“The legacy shipping loan portfolio continues to weigh heavily on the bank and, again, made extensive valuation allowances unavoidable in the first half of 2015,” said the bank, which is based in Hamburg and Kiel, and has total assets of about €113bn.
It reported a pre-tax profit of €222m, less than half last year’s result, but is on track to make a profit for the second year in a row. The bank lost almost €3bn during the credit crisis. The state government of Schleswig-Holstein and the city-state of Hamburg own about 85% of the bank.
“To this day, HSH Nordbank’s suffers from the serious omissions and poor decisions of the past,” said Constantin von Oesterreich, chairman of HSH Nordbank.
“Particularly with a view to the billions in ship loans. We now need substantial relief for our balance sheet, which is the case that our shareholders, Hamburg and Schleswig-Holstein, are making in talks with the EU Commission.”