Newly privatised Hamburg Commercial Bank (HCB) has revealed an increase in shipping lending for 2018 as provisions were cut.
The German bank, which changed its name from HSH Nordbank this month, said its maritime division added EUR 0.9bn ($1.02bn) in new loans, up from EUR 0.5bn in 2017.
But it said: "The bank intentionally restricted its new commitments in light of the competitive pressure on margins."
Overall new client business in 2018 dropped to EUR 8.4bn from EUR 8.6bn.
Loan loss provisions were slashed to EUR 367m from EUR 1.27bn, reflecting the continued conservative approach to risk.
HCB said: "Thanks to strict risk and return requirements, gross and net margins on new business have both improved, which is gradually leading to a higher return on equity."
The non-performing exposure ratio is seen at around 2%, down from 10.4% at the end of 2017.
Back in black
HCB reported stable total income of EUR 1.58bn and a profit before tax of EUR 97m, against a loss of EUR 453m in 2017.
The result was due to a good operating performance and new business almost at the previous year's level, as well as considerable cost-cutting successes, it said.
The lender was bought last year by private equity funds including Cerberus Capital Management and JC Flowers.
“We achieved all our goals in 2018," said HCB CEO Stefan Ermisch.
"The first privatisation of a Landesbank has been successfully completed and we have already set the course for our multi-year transformation.
"Ahead of us lies a comprehensive repositioning of Hamburg Commercial Bank in both operational and financial terms: we want to create added value for our clients and shareholders."
