Hamburg’s Finance Senator Andreas Dressel (SPD) and his counterpart Monika Heinold (Greens) from Schleswig-Holstein at a press conference on the end of the HSH Nordbank, which has since been privatised
Photo: dpa/Markus Scholz
“It could have been much, much worse.” In a good mood, Hamburg’s Finance Senator Andreas Dressel (SPD) drew a line under the debacle of the former HSH Nordbank during a press conference in his office on Gänsemarkt on Friday afternoon. Seven years after the takeover of ailing ship loans by a bad bank founded especially for this purpose, i.e. a winding-up agency, they can now handle them themselves. With profit. The bottom line is that Hamburg and Schleswig-Holstein are currently assuming losses of around 9.2 billion euros due to the bankruptcy of HSH Nordbank.
HSH Nordbank emerged in 2003 from the merger of the public Hamburgische Landesbank with the Landesbank Schleswig-Holstein, typically as a stock corporation. The credit institute got into trouble mainly as a result of the board’s speculative expansion policy. The Hamburg Senate and the state government in Kiel as owners, as well as managers, politicians and trade unionists on the supervisory board, had tolerated the highly risky business policy.
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The state budgets benefited from the bank’s high dividend payments for a number of years. However, as a result of the financial crisis, the house of cards gradually collapsed. In addition, from 2009 the global shipping crisis weighed on what was then the world‘s largest ship financier.
Sale to US hedge funds
The European Commission decided in 2016 that the bank had to be wound up or privatised. This was Brussels’ receipt for the rescue measures that Hamburg and Kiel financed with an amount in the double-digit billions. The governments in Hamburg and Kiel had opted for privatization against the advice of some economists, some of them left-wing economists.
Also to save jobs. In 2018, HSH Nordbank was then sold to a group of investors led by the US hedge fund Cerberus for a rather modest purchase price of one billion euros and has since been known as Hamburg Commercial Bank, or HCOB for short. The first privatization of a public state bank in Germany was thus perfect. HCOB is now profitable. For the past year, the shrunken bank reported a consolidated profit of 425 million euros. Less than 1,000 of what used to be around 5,000 jobs have been preserved.
In December 2015, the states of Hamburg and Schleswig-Holstein founded »HSH Portfoliomanagement« as a bad bank. It bought non-performing financing from the Nordbank for 253 ships at a price of 2.4 billion euros and was supposed to “handle it in a value-preserving manner”. This was also possible because freight rates skyrocketed during the corona pandemic and container freighters were in great demand again. The winding-up agency will distribute a profit of 378 million euros to the two countries before it is wound up in the fall.
Possible involvement in Cum-Ex
“As bitter as the losses from the HSH Nordbank disaster were,” said Schleswig-Holstein’s Finance Minister Monika Heinold (Greens), “the result from the sale of the ship portfolio is just as gratifying.” The chosen strategy of taking time for the settlement was just right. »The portfolio management did a great job.«
In the black-green cabinet of Daniel Günther and Robert Habeck, Heinold was seen as a staunch supporter of the controversial privatization of HSH Nordbank. In Hamburg, the current mayor and then finance senator Peter Tschentscher played a decisive role in Olaf Scholz’s red-green senate. A parliamentary committee of inquiry shed little light on the dark chapter. HSH Nordbank is now also suspected of having been involved in criminal cum-ex transactions.
Dressel speaks of “megalomania”
The conclusion of SPD Senator Dressel: The “financial megalomania” had cost Hamburg and Schleswig-Holstein dearly. Other Landesbanken weathered the turbulence after the 2007/2008 financial crisis better. Baden-Württemberg’s LBBW and BayernLB are once again seen as successful players on the domestic and international financial markets.
Next to HSH Nordbank, the Landesbank for Bremen, Lower Saxony and Saxony-Anhalt was probably the deepest swamp of management errors, expensive rescue attempts and the classic business model of public credit institutions. However, NordLB reported a loss again for 2022 and is arguing with the savings banks. They had contributed a billion euros to the rescue of NordLB, but they see it as a competitor, at least in part, and do not want to share in any further losses.