CEO of HSH Nordbank steps down

HSH Nordbank, a major real estate financier in Germany, has announced that Hans Berger is stepping down as CEO. The move is an acknowledgement that the management board failed to anticipate the severe effect the credit crunch would have on the company.

'The Management Board failed to foresee the degree of intensity and duration of the crisis and the risks for the bank's earnings that have come to light. Since the third quarter, writedowns and impairments on investments have exceeded the bank's operating income,' Berger said.

'In spite of positive results in its core areas of business, the bank will therefore post a negative result this year as a consequence of individual capital-market transactions and the general trend on capital markets. I take responsibility for this,' he added.

Wolfgang Peiner, chairman of the supervisory board, accepted Berger's resignation and asked Dirk Jens Nonnenmacher to take over as CEO until further notice.

Nonnenmacher has been chief financial officer at the bank since October 2007. 'In appointing Nonnenmacher, the supervisory board underlines the fact that the tasks of risk controlling and risk management have top priority against the backdrop of the crisis on the financial markets,' HSH Nordbank said.

The supervisory board has also commissioned the bank's new auditor, KPMG, to review all major capital-market transactions with Nonnenmacher 'over and above the normal audit of financial statements'.

Last week HSH became the third German bank to signal that it was approaching SoFFin, the German federal bank rescue fund, to shore up its capital structure.

HSH Nordbank, a regional bank focused on real estate, transport and shipping finance, said it will apply for a guarantee facility totalling EUR 30 bn. About half of this amount will be drawn down with a view to supporting the bank's business model. 'The second half will be used as a precautionary measure in the event the turbulence on the financial markets make the coverage of further risks necessary,' the bank said.

Commerzbank and Hypo Real Estate have also tapped the fund for assistance.

Commerzbank, Germany's second-largest bank, has said it will seek EUR 8.2 bn in cash and EUR 15 bn in funding guarantees

Hypo Real Estate sought EUR 15 bn in guarantees while a larger EUR 50 public-private bailout was being finalised. Georg Funke was forced to resign as CEO of Hypo Real Estate in October when it became clear that the original EUR 35 bn bail-out agreement negotiated with the government and financial institutions would not be sufficient.