OLB begins preparations for its IPO in 2023
(Photo: Oldenburgische Landesbank)
Frankfurt According to financial circles, the US financial investor Apollo is starting preparations for an IPO of the Oldenburgische Landesbank (OLB), which could value the private bank at well over a billion euros. “The bank is preparing for capital market readiness and is planning to report in IFRS again, probably from June 2022,” said CFO Rainer Polster to the Handelsblatt. “The bank will decide all further steps in close coordination with the owners and depending on the market situation at the time.”
Internally, the OLB started the “IPO Readiness” project, said several people familiar with the matter. As a step after the change in accounting from the German Commercial Code (HGB) to the international accounting standard IFRS, investment banks are to be mandated in autumn to support the new issue.
The actual IPO should then follow in the first or second quarter of 2023, provided the market environment is right. The owners declined to comment or were initially unavailable.
At the end of June 2021, OLB’s total assets stood at 22.8 billion euros and equity at 1.2 billion euros. In the event of an IPO, the institute could be valued at a little more than its book value. For comparison: Deutsche Bank is currently trading at 0.42 times its equity, Commerzbank at 0.32 times.
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Other institutes such as the Austrian Bawag, on the other hand, trade at 1.13 times. Investor Cerberus bought the former trade union bank, which had speculated on risky securities, in 2007, then restructured it and successfully floated it on the Vienna Stock Exchange ten years later. OLB has been managed by former Bawag manager Stefan Barth since August.
Bank with a history
Apollo, the US pension fund Teacher Retirement Systems of Texas and the British investor Grovepoint acquired OLB in 2017 for a good 300 million euros. Since then, the institute has merged with Bremer Kreditbank, previously bought by Apollo and his co-investors, and the Neelmeyer bank, and later also with Wüstenrot Bank AG Pfandbriefbank.
The roots of OLB go back to the year 1869, when the institute was founded by the Frankfurt bank Erlanger & Söhne. From 1978 the OLB belonged to the Dresdner Bank. In 2001 the investment bank was swallowed up by Allianz. When Dresdner Bank was resold to Commerzbank, OLB remained with the Munich insurance group.
Allianz Bank was managed under the umbrella of OLB. The insurer wanted to sell funds and banking products through its own agents. However, the associated hopes were not fulfilled, so that Allianz Bank was closed in 2013 after years of losses. Since then, OLB has restricted itself to its traditional business as a regional bank in the northwest.
Surplus of almost 50 million euros
The OLB offers banking services for private and business customers, but also financing for player transfers from football clubs, seagoing ships and commercial real estate. In the first half of 2021, the bank increased its operating income by five percent to 239 million euros and posted a surplus of 45 million euros, which corresponds to a return on equity after taxes of 7.6 percent.
The aim of the bank is a return on equity after taxes of more than twelve percent and a cost-income ratio (cost-income ratio) of less than 50 percent, CEO Barth said in October.
With a hard core capital ratio of 12.3 percent, the bank is well above the minimum requirement of 7.85 percent. Savings programs had contributed to reducing the cost / income ratio to 65 percent. According to a report by the Nordwest-Zeitung, another austerity program is planned in which the current 1,800 workforce is to be reduced by 15 percent.
The personnel adjustments are currently taking place via a volunteer program, early retirement agreements, working time reductions as well as in general and in the longer term also via contracted agreements and natural fluctuation, explained a bank spokeswoman.
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