[Reuters] HSH Nordbank to transfer retail banking to German savings banks
[HSH.UL] FRANKFURT, July 2 (Reuters) - HSH Nordbank [HSH.UL] said it
would transfer its retail business to German savings banks in
Kiel and Hamburg to comply with European Commission requirements
following its state bailout in the financial crisis.
Like other state-owned German regional lenders known as
landesbanks, HSH Nordbank lost billions of euros on risky
investments in the 2007-2009 crisis, forcing its owners to prop
it up with a capital injection and an additional 10 billion
euros ($13.04 billion) in loan guarantees. [ID:nL5N0B6GIP]
The bank currently has an arrangement whereby it absorbs the
first 3.2 billion euros in losses, while its owners - the
regional states of Hamburg and Schleswig-Holstein - have
provided a so-called second-loss guarantee. [ID:nL6N0CBAN6]
European Union regulators demanded that HSH Nordbank shrink
its business as a condition for approving state support.
Savings bank Foerde Sparkasse will take on 3,000 of HSH
Nordbank's 7,000 clients, with the rest going to Hamburger
Sparkasse, HSH said.