Beefed up origination team will ready bailed-out bank for sale or flotation
Deutsche Pfandbriefbank has hired three more originators in its international team, in Paris and London. The appointments are part of a drive to increase lending and generate profits ahead of a sale or flotation. The strategy was put in place last year after the bank transferred €173bn of largely toxic loans to a ‘bad bank’, FMS-Wertmanagement.
But a report commissioned by the German government and published this month says “very serious consideration” should be given to winding up the bank’s parent, Hypo Real Estate, and the Deutsche Pfandbrief-bank property and public finance lending arm with it.
The report says a sale is not expected to generate much more than winding it up (see below). International lending margins are higher than in the German market and the bank is keen to double the €1bn that the division lent last year. In London, Harin Thaker, head of international real estate finance, has hired Matthew Clark, who will be a director, and Madeleine Forrest as originators.
They will work with London managing director Michael Kenney. Clark most recently worked at Lloyds Banking Group as head of major corporates, real estate and has also worked at Société Générale and Nomura. Forrest worked at WestImmo.
In Paris, Philippe Duvergne is joining from Royal Bank of Scotland as a managing director and will focus on domestic and cross-border lending, alongside Renaud Jezequel. Thaker said: “A number of banks are shutting down or withdrawing [ from property lending]. We have restructured ourselves and have a clear focus to carry on with new business and to do that we need to beef up our team.”
The bank has also hired Matthew Stansfield in Paris and Eliza Klasinka in London, as analysts. Forrest is the second of three people to resign from troubled German bank WestImmo’s London office. WestImmo’s parent is up for sale.
Her former boss, Peter Denton, is joining BNP Paribas in April, while Chris Dunton has left and will join Santander. Late last year, Richard Bentley resigned from Thaker’s team to join Helaba and replace Ingeborg Warschke, who is retiring.
Report finds sale may not be best-case scenario
The Deutsche Pfandbriefbank report, produced by Bonn University for the government, was leaked to the German press ahead of its official publication on 16 February. It investigated how the government should exit from the banks it bailed out during the financial crisis.
Written by a committee chaired by Professor Daniel Zimmer, it says the Munich-based bank may face “weak margins and strong competition” and a sale would not generate higher proceeds than a wind down. Deutsche Pfandbriefbank returned to profitability in the second half of last year, after a bad bank was set up.