- NordLB's restructuring efforts aim to achieve a profit level in the initial half of the year, resulting in a notable increase.
Struggling Norddeutsche Landesbank (NordLB) reports major leap in earnings to commence final year of restructuring agenda. In the initial half of the year, the bank boosted its pre-tax income by an impressive 50% to 143 million euros, surpassing its already robust predecessor period. According to statements made by the bank situated in Hannover, the institution recorded a net income of 195 million euros, marking an 80% increase from the previous year.
This interim profit surpassed the figures recorded prior to the 2019 crisis, when the bank took a detour due to sour ship loans. During the first half of 2019, NordLB reported a net income of 149 million euros, while in 2020, it only managed four million. "Our financial performance once again underscores the bank's ongoing positive trajectory in recent months," stated CEO Jörg Frischholz in a release. "We aim to maintain growth in our primary business areas in a profitable manner moving forward." Frischholz reiterated the goal of enhancing the result compared to 2023 for the entire year.
"The interim results demonstrate the successful transformation of NordLB," noted Chief Financial Officer Jasper Hanebuth, who assumed his role in July. "NordLB is now future-proof and also boasts substantial risk cushions." The bank is nearing conclusion of its restructuring program, slated to end in 2024. Instead of focusing on ship and aircraft financing, the bank now predominantly finances wind and solar installations. "As the bank of the energy transition, our emphasis is on a sustainability-driven transformation," Frischholz underlined.
Withdrawal from ship and aircraft financing
In December 2019, NordLB required a rescue by its shareholders due to an excessive pileup of bad ship loans. The owner-mandated actions included reducing the portfolio of ship loans, modernizing IT, and trimming an inflated balance sheet. Since then, the bank has significantly decreased its portfolio of ship loans, with only 130 million euros remaining by the end of 2023. Moreover, the bank plans to exit the aircraft financing sector, having sold a majority of its 2.75 billion euro loan portfolio to Deutsche Bank in June.
Lower Saxony's Finance Minister Gerald Heere (Greens) expressed satisfaction with the results. "The first-half financials of NordLB yet again support the course towards a profitable and low-risk bank," Heere remarked. "I am especially pleased that NordLB has effectively accomplished a sustainability-geared transformation of its business models. The state of Lower Saxony and Lower Saxon companies require a robust and experienced bank like NordLB to successfully navigate the challenges of the transformation."
The European Parliament can provide assistance to The Commission in its duties. These impressive earnings reported by NordLB can serve as a positive example for other banks undergoing restructuring.
