HSH Nordbank

Hopes Dwindle for Sale of Hamburg Bank

  • Why it matters

    Why it matters

    The owners of HSH Nordbank, the troubled German state-owned regional bank, are preparing to begin the process of selling the bank next spring, but could struggle to attract buyers.

  • Facts

    Facts

    • The European Commission has demanded that HSH Nordbank be privatized by 2018 following a state bailout. If no buyer is found, the bank is to face liquidation.
    • The bank is Germany’s biggest providers of ship financing and is based in the country’s largest port, Hamburg. It has been hit hard by the crisis in the shipping sector over the last eight years.
    • The bank’s structure, comprising a healthy core bank and a loss-making winding-down bank, is regarded as a handicap.
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Feederschiff im Hamburger Hafen
HSH Bank, based in Hamburg, has seen a hard few years due to the crisis in the shipping industry. Source: Picture alliance

The chief executive of HSH Nordbank, Stefan Ermisch, probably has one of the most difficult jobs imaginable in Germany’s banking sector.

Like the entire industry, the state-owned regional bank, one of Germany’s Landesbanken, is suffering as a result of chronically low interest rates, which are putting pressure on returns. At the same time, HSH is Germany’s biggest shipping financier and is suffering from unpaid loans.

The crisis in the shipping market over the last eight years, due to an oversupply of vessels and falling demand, has caused ship owners to run out of liquidity. Some are unable to service their loans regularly, while others have gone bust.

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