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FINANCIAL CRISIS

Hypo Real Estate boss quits abruptly

The head of nationalized bank Hypo Real Estate resigned abruptly on Thursday because of differences of opinion with the government’s bank rescue fund.

Published: 25 March 2010 17:49 CET
Hypo Real Estate boss quits abruptly
Photo: DPA

Axel Wieandt, who took over as chairman of the real estate bank after it was saved from a Lehman Brothers-style collapse by the German government stepped down amid “differing views … regarding the management of the company,” a statement from the bank said.

He was at odds with the Financial Market Stabilisation Fund (Soffin), the government fund that was set up in the midst of the financial crisis and which has effectively owned the Hypo Real Estate (HRE) since the bailout. Then, teetering on the brink of collapse, HRE was rescued with a bailout package of €100 million, much of which came from the government.

The bank board said it regretted the departure of Wieandts, who had played a central role in stabilizing and providing fresh direction for the firm.

“Axel Wieandt took on the responsibility of CEO at the height of the crisis and has made a significant contribution to the stabilization and realignment of the Company,” said Bernd Thiemann, chairman of the bank’s supervisory board. “A course has been clearly set for the future. We wish Axel Wieandt all the very best.”

Wieandt will be succeeded by Chief Risk Officer Manuela Better “until further notice,” according to the statement.

The HRE board has relieved Wieandt of his duties with immediate effect.

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FINANCIAL CRISIS

US investors buy up north German state bank hit by financial crisis

Two German states said Wednesday they would sell troubled maritime lender HSH Nordbank in the first full privatisation of one of the regionally-owned "Landesbank" lenders hit badly by the financial crisis.

Published: 1 March 2018 09:18 CET
US investors buy up north German state bank hit by financial crisis
Photo: DPA

Leaders from Hamburg and Schleswig-Holstein states said at a news conference they would sell their 95-percent stake for one billion euros to investors led by two US funds, J. Christopher Flowers and Cerberus capital.

The European Commission ordered a change of ownership in exchange for its approval in 2009 of a €13-billion-euro rescue – one of two taxpayer-funded bailouts for the north German bank since the 2007-2008 financial crisis.

That rescue plan helped cover risky investments amounting to €60 billion, most of them in real estate and the shipping sector, which HSH built up in the pre-crisis years.

“Today we've reached an important milestone on the way to selling the states' holdings in HSH,” which had over the years proved “very costly to the taxpayer,” Schleswig-Holstein state premier Daniel Günther said.

Wednesday's deal must still earn a green light in a further competition probe by the Commission and from banking supervisors at the European Central Bank.

If it goes ahead, “the privatisation means that we can limit the damage to the states that has resulted from the bank's irresponsible strategy of expansion between 2003 and 2008,” Hamburg mayor and future federal finance minister Olaf Scholz said.

The sale was immediately criticized by Sahra Wagenknecht, leader of Die Linke (the Left Party), who described it as a gift to “the finance mafia.”

“Future profits will be privatized, tax payers will lose multiple billion euros and jobs are at risk – whoever calls that a success doesn't deserve to be finance minister,” she wrote on Twitter.

Hamburg and Schleswig-Holstein have taken on a portfolio of HSH's bad loans, meaning taxpayers could face a bill of up to €7 billion when they are eventually sold to private buyers.

The contract for Wednesday's sale also provides for HSH's payroll to be halved, to around 1,000 workers.

HSH's departure into the private sector leaves just five of the “Landesbank” lenders standing after a series of post-crisis interventions.