HSH Nordbank Q1-2012

INTERIM REPORT AS OF 31 MARCH 2012 HSH NORDBANK AG INTER I M R EPORT AS OF 31 AS31 OF EPORT M ARCH 2012 ARCH STARK FÜR UNTERNEHMER [Strong for entrepreneurs] HSH NORDbank GROUP at a GLANCE INCOME Statement (€ m) 1.1. – 31.3 1.1. – 31.3 2012 2011 Net income before restructuring 183 243 Net income before taxes 97 131 Group net income 128 126 BALANCE SHEET (€ bn) 31.3.2012 31.12.2011 Equity 5.5 4.8 Total assets 133.4 135.9 Business volume 142.6 145.4 CaPitaL ratiOS 1) (%) 31.3.2012 31.12.2011 Tier 1 capital ratio 14.5 13.8 Tier 1 capital ratio excl. hybrid financial instruments 11.1 10.3 Regulatory capital ratio 22.4 21.3 EMPLOYEES 31.3.2012 31.12.2011 Full-time positions 3,578 3,684 Total employees 4,156 4,265 Germany 3,706 3,778 Abroad 450 487 LONG-TERM ratings Unguaranteed Guaranteed Public-sector Mortgage Ship liabilities liabilities 2) Pfandbriefe Pfandbriefe Pfandbriefe Moody’s Baa2 Aa1 Aa1 Aa1 Baa1 Fitch A − AAA – – – 1) including market risk positions; taking the financial statements as at 31 March 2012 into account 2) Obligations covered by “Gewährträgerhaftung” (guarantee obligation) CONTENTS Letter from the Chairman of 04 the Management Board Interim management report 06 of the HSH Nordbank Group Underlying conditions and business overview 06 Business developments 08 Earnings situation 08 Net assets and financial position 10 Segment reporting 14 Outlook 22 Risk report 24 Interim financial statements 32 of the HSH Nordbank Group Statement of comprehensive income 32 Quarterly review 34 Statement of financial position 36 Statement of changes in equity 38 Condensed cash flow statement 40 Explanatory notes 41 General information 41 Notes on the income statement 51 Notes on the statement of financial position 58 Segment report 69 Notes on financial instruments 72 Other disclosures 86 Review opinion 94 Responsibility statement 95 by the Management Board Contact / Imprint 96 4 HSH NORDBANK 2012 Against the backdrop of its continuing efforts for the reorgan- ing acceptance of the new business model in the markets, isation of the Group, and despite a market environment the Bank is confident that it can expand new business during that remained difficult during the first quarter of 2012,HSH the course of the year. Nordbank generated net income after taxes of € 128 million compared to € 126 for the same period in the previous year. HSH Nordbank continued to reduce total assets during the Net income of the Bank before restructuring expenses, ex- reporting period. Total assets still amounted to € 133 billion as penses for government guarantees and tax effects decreased at 31 March 2012 compared to € 136 billion at the 2011 year- from 243 million in the previous year to € 183 million. Net end. In addition, the capital base was further strengthened income for the Core Bank increased to € 263 million compared during the first quarter. The Tier 1 capital ratio, including to € 145 million during the first quarter of 2011. market risk positions, rose to 14.5 % compared to 13.8 % at the end of 2011. In particular, the capital injection by the fed- The Bank’s quarterly net income reflects the effects of a series eral states of Hamburg and Schleswig-Holstein during the first of positive and negative factors. In addition to extraordi- quarter pursuant to an EU requirement contributed to the nary income from the successful repurchase of subordinated increase in the ratios. In addition, the repurchase of subordi- bonds for purposes of strengthening the capital base, reduc- nated bonds had a positive effect. tions in government guarantees, income from the sale of equity holdings and the cost reduction measures initiated in the We expect increasing success in the customer business for previous year all had a positive impact on net income. How- 2012. However, business developments during the course of ever, valuation effects caused by market fluctuations as well the year will also be influenced by uncertainties in the over- as the winding-down of additional interest-bearing transac- all economic development, the incalculable consequences of tions had a negative impact. the European sovereign debt crisis and, in particular, by the situation in the international shipping industry. Against Increased loan loss provisions for credit risks related to this backdrop, we expect an increased need for loan loss restructuring commitments within the Restructuring Unit, in provisions. the shipping portfolio among others, were largely offset by the hedging effect of the second loss guarantee granted by the In spite of all these uncertainties, I am convinced that we will federal states of Hamburg and Schleswig-Holstein. This succeed in the market with our business model “Bank for means that the guarantee had the intended risk-reducing effect entrepreneurs”, when looking at the progress we have already during the first quarter of 2012. The relief of the Bank is made and the results we achieved in the first quarter of still not associated with effective payment obligations on the 2012. I am confident, that we will master the challenges which part of the federal states. lie ahead of us and that we will be able to take advantage of the opportunities associated with the necessary transforma- We expanded customer business on a targeted basis during the tion of HSH Nordbank. first quarter and continued to push forward the acquisition of new business. This led to an increase in the volume of new financing transactions in the Core Bank compared to the same period in the previous year; however the level seen in the final quarter of 2011 could not yet be achieved at the start DR. PauL LERBINGER of 2012. On the basis of intensified sales measures and increas- Chairman of the Management Board of HSH Nordbank Letter frOM the Chairman OF the Management BOarD 5 Dr. Paul Lerbinger Chairman of the Management Board of HSH Nordbank 6 HSH NORDBANK 2012 UNDERLYing CONDitiOns and business OVERVIEW UNDERLYING CONDITIONS which must be paid for insurance on government bonds of the peripheral countries. Global economy stabilising In light of disappointing economic data from both sides of the While the global economy lost significant momentum at the Atlantic as well as the prospects of higher government defi- end of the past year, signs of an upward trend were observ- cits in Spain, investors again experienced heightened levels of able during the early months of this year. The Asian region in disillusionment so that the premiums on insurance for gov- particular expanded dynamically. The US economy – sup- ernment bonds issued by the peripheral countries rose again. ported by declines in unemployment – exhibited moderate Elections in France and Greece in early May also contrib- growth while the economy in the eurozone merely stag- uted to an increase in uncertainty on the part of investors re- nated. Growth was particularly dampened by the increased garding future developments within the eurozone. While savings efforts on the part of many countries within the yields on ten-year German government bonds rose to over 2 % eurozone. Compared to Fall 2011, expectations of European at one point, they declined to new historic lows during the businesses and consumers were again slightly more opti- second quarter as a result of a rise in risk aversion. Following mistic. a marked increase in March, yields on US treasuries with the same maturity have since fallen again. Germany experienced marked improvement despite the drag resulting from the European debt crisis. Foreign trade in In light of the weak economies in many industrialised coun- particular provided a boost, however, consumer spending tries, the large central banks exhibited strong expansionary increased as well supported by continued declines in unem- tendencies. For example, the Fed continued to hold open ployment and increases in wages. the possibility of additional bond repurchases and signalled that it would retain the key interest rate at its currently low Reduced tension in the financial markets during the level until the end of 2014. The ECB acted cautiously for the first quarter time being following the extraordinary measures imple- Compared to the high levels of turbulence experienced during mented to increase liquidity. the second half of 2011, tension in the financial markets declined significantly during the first few months of the cur- Tensions eased somewhat on the foreign exchange markets as rent year. The driving factor for increased willingness to well during the first quarter. In particular, the euro stabilised accept risk on the part of investors was primarily the injection again somewhat compared to its low point versus the US dollar of additional central bank liquidity following the three-year mid-January. tenders offered by the ECB in December 2011 and February 2012. These measures not only improved the liquidity situa- Trends in the international stock markets were exceedingly tion at the European banks but also improved the funding positive during the first quarter. The primary sources of situation in the peripheral countries as a portion of the addi- this optimism included hope of solution to the debt crisis, a tional liquidity was invested in government bonds from these slight improvement in the US economy and low interest countries. rates. For example, the DAX rose by almost 18 %. However, during April the markets resumed a downward trend as con- In addition, the rescheduling of Greek government bonds and cerns about Spain’s stability contributed to a dampening of the the approval of the second rescue package for Greece, agree- mood. ments on the part of European governments to a fiscal package, on a temporary increase in the European “firewall” out of the European Financial Stability Facility, EFSF, and agree- ment with regard to the future European Stability Mecha- nism, ESM, all contributed to making progress in coping with the European debt crisis.

Load more