HSH Nordbank

Germany’s Problem Bank Sinks Deeper

ShippingContainers-DPA
The global shipping crisis is the main factor behind HSH Nordbank's crisis.
  • Why it matters

    Why it matters

    Taxpayers will have to foot the bill if HSH Nordbank fails, and its demise could seriously damage its creditors.

  • Facts

    Facts

    • HSH has received €3 billion ($3.26 billion) in capital and €10 billion in state guarantees since 2009.
    • The bank will likely have to draw about €2 billion of the state guarantees between 2019 and 2025.
    • With €20 billion-worth of failed shipping loans made in dollars, the weak euro is its main problem.
  • Audio

    Audio

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Ever since it was dramatically rescued in 2009, Germany’s HSH Nordbank has been giving its state creditors seemingly endless amount of sleepless nights.

Now, six years after it was first bailed out by the two German states that are its primary shareholders – Hamburg and Schleswig Holstein – the bank is once again on the brink of collapse and asking the two states to keep it afloat.

Another state bailout for HSH Nordbank would come at a particularly awkward time. The recent collapse of Austrian bank Hypo Alpe Adria, and the Austrian government’s refusal to pay the bank’s outstanding debts, has called into question the value of state guarantees such as the ones that HSH Nordbank has relied on heavily since 2009.

The bank was once the world’s largest ship financier, but a collapse in the world’s container-shipping industry, which like the housing market had blown up into a bubble in the run-up to the 2008 crisis, hit it harder than anyone else.

The bill has already been high. In 2009, the states bailed the bank out with a €3 billion ($3.26 billion) capital injection and offered another €10 billion in state guarantees to stop the bank collapsing.

Now, Handelsblatt has learned that the finance house will have to make heavier use than expected of the state guarantees to keep it alive for the next decade.

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