Shipping lender Hamburg Commercial Bank (HCOB) has enjoyed a "solid" year following its privatisation under private equity ownership.
The former state-controlled HSH Nordbank was bought in November 2018 for $1.2bn by a consortium led by Cerberus Capital Management and JC Flowers.
It said loan loss provisions were reversed to the tune of €11m ($12m) last year, reflecting the "good portfolio quality". In 2018, provisions were €367m.
The bank has developed targeted growth strategies in its core areas of shipping, property, corporate and project finance, it said.
It has also laid the foundations for new business areas, such as financing of factoring and leasing companies and diversified lending, including outside the German domestic market.
"This satisfactory result is due, among other factors, to a consistent focus on new business with adequate margins, significantly lower funding costs and structural progress in reducing costs," HCOB said.
Caution over new business
The net profit was down to €12m from €77m in 2018.
HCOB has managed new business "selectively", it said, and achieved "considerably higher profitability" on an intentionally lower gross business volume of €7.2bn, compared with €8.4bn in 2018.
Total assets have been reduced to €48bn from €55bn.
"The significantly lower refinancing costs in the wake of privatisation contributed considerably to this encouraging performance," it added.
The number of staff has been cut to 1,482 from 1,716 over the year.
But HCOB wants to slash this further, to 700 in 2022.
“Our comprehensive transformation towards being a commercial bank with above-par capital resources and competitiveness follows clear objectives," chief executive Stefan Ermisch said.
"The main focus is on sharpening our market image as a specialist provider of finance, making significant efforts to reduce administrative expenses, investing extensively in our technological infrastructure and digitalisation, and consistently building our financial strength."
