HSH Nordbank gets bail out

HSH Nordbank needs fresh money by June, otherwise it runs the risk of being closed down by the financial industries’ watchdog, BaFin.
The bank is owned by Hamburg and Schleswig-Holstein, US investor JC Flowers and the regional savings banks.
JC Flowers and the regional saving banks were not prepared to participate in the capital increase.
They also feared that their shares would be diluted and initially opposed the capital increase but eventually accepted the move.
The decision was taken unanimously, HSH said.
Schleswig-Holstein and Hamburg have increased their stake in HSH from 60% to more than 80%, while JC Flowers’ stake shrank to below 10%.
“With today’s decision we have passed an important milestone for HSH Nordbank’s sustainability for the future,” the chairman of the bank’s supervisory board said.
The day before, HSH reported record losses of €188m before tax for the first quarter of 2009, compared with a loss of €91m in the same period of 2008.
The bank said it was content with the result as it had expected that the loss would be €60m higher.
The bank would not comment on a report that HSH is expecting a loss of €1bn for the full year 2009 and €750m for 2010.
However, it had said earlier that it expects to produce losses.