Frankfurt Stefan Ermisch has experienced a lot in his ten years at Hamburg Commercial Bank (HCOB): The manager, who joined in 2012 as Chief Financial Officer and has headed the institute since 2016, has rehabilitated the former Landesbank HSH Nordbank, cleared of legacy issues, at the behest of the European Union privatized and made profitable.
Now the 56-year-old is resigning unexpectedly for many at the end of September. “After ten years it will eventually be enough,” he said at a press conference on the occasion of the quarterly figures. The former HSH Nordbank “wrote a piece of banking history in Germany,” he said. “I am very proud that I was able to contribute to this and that I had a very strong influence on many things.”
In fact, the former Landesbank, which was renamed HBOC in 2019, has a checkered past. After the institute was rescued with the help of billions of taxpayers’ money because of bad ship loans, the European Commission forced the sale to private investors. At the end of 2018, the Landesbank went to financial investors around Cerberus and JC Flowers for one billion euros.
Against some resistance, Ermisch boxed the privatized institute, which until then had still been anchored in the savings banks and state banks, into the deposit insurance system of the private banks, “which was also quite complicated,” as Ermisch emphasizes. Since January, HCOB has finally been a member of the private deposit protection scheme of the Association of German Banks (BdB) – a precedent in the German financial world.
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“That’s more than enough for a managerial life,” says Ermisch. In his view, this is “the right time” to “pass the baton” on to his successor Ian Banwell, who will continue to lead the bank “very successfully”.
Press conference ended after eight minutes
There is speculation in the financial industry that Ermisch and Banwell may not have been best friends. It can also be heard that they did not always agree on strategic issues. What is wrong with such rumors could not be clarified at the video conference. Because Ermisch did not allow questions about the unexpected change in management – or about the quarterly figures. The video conference about the drastic change in leadership therefore ended after less than eight minutes.
Profitable
20.5
percent
Return on equity after tax is reported by HCOB in its half-yearly balance sheet.
Chairman of the Supervisory Board Juan Rodríguez Inciarte announced that he had “regretfully agreed” to Ermisch’s request, but of course respected his decision. At the beginning of the event, he made it clear how he otherwise assesses the change in leadership. “This is a big day for the bank,” said the head of the supervisory board. “I’m happy to announce the best transition in the management team.” Banwell knows the bank inside out.
The 58-year-old American has been CFO of HCOB since 2019. Before that, the manager had worked for the financial investor Cerberus. Banwell resisted the request of his supervisory board chairman to introduce himself with a few words. This is a day to honor Stefan Ermisch’s successes, he said.
The half-year figures, the original reason for the short conference, were only mentioned in passing by Ermisch.
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“I’m leaving with top numbers and leaving the bank in perfect shape with very good financials,” he said in essence. The half-year result? “Above 200 million euros after taxes”. The capital ratios? “Enormously strong”. The efficiency of the HCOB? “Hugely improved”.
“I leave with top numbers and leave the bank in perfect condition with very good financials.” HCOB boss Stefan Ermisch
In fact, the institute, which specializes in financing commercial real estate and ships as well as project financing, earned well in the first half of the year. Although the total income from regular business shrank by ten percent. This was due to valuation losses in the strategic investment portfolio caused by price fluctuations on the financial markets.
However, because the bank was able to release part of its risk provision – around 30 million euros – for bad loans and also generated special income of 40 million euros, the consolidated result rose from 194 to 207 million euros. The return on equity after taxes increased slightly to 20.5 percent.
First dividend “after what feels like a hundred years”
In operational terms, however, the half-year went well for the bank. The net interest margin has increased, and the bank has also done more new business. The rising interest rates should continue to support the good business development. The institute therefore increased its pre-tax profit forecast for the full year from 280 million to more than 300 million euros.
But Ermisch also left questions about “the technical details of the figures” to his press office. Everything that concerns the future will be discussed by his successor from October.
Ermisch only addressed one topic for the future personally: the bank will pay a dividend next year. “For the first time in what feels like a hundred years,” he said. Most recently, the predecessor institute HSH Nordbank wanted to pay a dividend in 2009. This project was then stopped because of the billions in state aid that the institute had received.
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