HSH Nordbank intends to close down its real estate activities in Western Europe and the US as part of a major restructuring triggered by financial losses. The regional German financier presented a draft plan this week aimed at rebuilding its battered capital position. A decision on various proposals in the document will be taken next week.

HSH Nordbank intends to close down its real estate activities in Western Europe and the US as part of a major restructuring triggered by financial losses. The regional German financier presented a draft plan this week aimed at rebuilding its battered capital position. A decision on various proposals in the document will be taken next week.

A key element of what HSH Nordbank describes as a 'strategic re-alignment' is refocusing the bank's activities in its home regions of Hamburg and Schleswig-Holstein in Northern Germany. The bank wants to strengthen its position in the region's key industries: shipping, aviation, transport-related infrastructure and renewable energies.

Several business lines are being phased out, including the real estate businesses in the US and Western Europe. The bank - which is one of the largest real estate financiers in Germany - has offices dealing with property finance in London, Paris, Amsterdam, Copenhagen, Warsaw, Moscow, New York and Singapore. The re-organisation will halve the bank's balance sheet to a targeted EUR 115 bn in 2012.

HSH Nordbank said the withdrawal from various businesses, including international real estate, will be carried out 'gradually and in in-depth dialogue with those affected'.

The bank said it expected to report a net loss of EUR 2.8 bn before tax and one-off charges for 2008. In a statement on its preliminary results, the state-owned bank said the figure compares to net profit of EUR 285 mln a year ago. The EUR 2.8 bn loss includes impairments of around EUR 1.6 bn on the credit investment portfolio and further writedowns of EUR 900 mln as a result of the financial crisis.

According to several media reports, the German bank is in talks for a EUR 3 bn capital injection from its owners, the states of Schleswig-Holstein and Hamburg which each hold stakes of about 30%.