Berlin, Frankfurt The CEO of NordLB, Thomas Bürkle, can probably leave his post with a profit. “If the current positive development continues, the NordLB Group will probably achieve a positive result this year. For the first nine months I can say that for sure, ”said Bürkle in an interview with the Handelsblatt.
So far, the Landesbank has not dared to make a forecast for the current year, which is understandable in view of recent history. Because the NordLB has been in the public eye since its near bankruptcy. In 2019, the Landesbank was no longer able to compensate for terrible losses in ship financing on its own. Shareholders such as the states of Lower Saxony and Saxony-Anhalt as well as the Sparkassen-Finanzgruppe put together a rescue package worth 3.6 billion euros, which was approved by the EU Commission at the end of 2019.
At the same time, a streamlining program was adopted. The balance sheet total has now fallen to less than 120 billion euros. In the core bank, a further decline to 95 billion euros by 2024 is targeted – but could also be a little higher: The number of 95 billion euros is “not set in stone,” said Bürkle. The number of employees is expected to drop from 6,000 to 2,800 to 3,000. According to Bürkle, there are currently around 4400.
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As part of the readjustment of the business model, the portfolio of ship loans, which was worth 20 billion euros in the high phase, has shrunk drastically to just 1.5 billion euros. When the portfolio is being wound down, NordLB benefits from the fact that it can dissolve risk provisioning. “The ship sales are having a positive effect. Our ratings were very conservative, ”said Bürkle.
But the bank is not only benefiting from the increased proceeds from ship sales. “We were able to further reduce costs and new business has developed positively,” said Bürkle. The share of non-performing loans in the total portfolio is around one percent. In an international comparison, this is a good value. The bank is still sticking to its target of a return on equity of seven percent.
Ongoing discussion about the future of the Landesbanken
In addition to NordLB, there are three other major Landesbanken in the public sector: BayernLB, Helaba and LBBW. They are significantly larger than NordLB and, in different proportions, belong to the respective federal states and regional savings banks.
Sparkasse President Helmut Schleweis brought consolidation into play two years ago – with a single Sparkasse central bank in the end. The starting point should be a merger between Helaba and the Sparkasse fund provider Deka. Schleweis finally gave up hopes of a timely merger.
NordLB was also repeatedly brought into play when considering the question of whether it can survive on its own in the long term. Bürkle explained: “Our transformation plan provides for an independent NordLB, and I cannot see that the bank’s sponsors have any other will.” NordLB is certainly “not a takeover candidate”.
The NordLB management looks to Berlin with great interest. A possible traffic light coalition of the SPD, Greens and FDP would further spur an important business area of NordLB. The Landesbank is already claiming a leading role in the renewable energies business in Germany. “Measured in terms of the number of transactions financed, we are clearly in the absolute top group,” said Bürkle.
It’s not just about wind and solar, but also about sustainable traffic and transport. With the new federal government, the issue is likely to gain further priority. “We benefit from our great expertise, after all, we’ve been active in this area for around 30 years,” says Bürkle. For him this is one of the flagship business areas. In its guidelines, NordLB has expressly excluded the financing of coal projects, for example.
From NordLB’s point of view, it would also be helpful if the financial regulators were to lower the equity requirements for sustainable loans. “That would be an instrument to promote the greenhouse-neutral restructuring of the economy,” said the CEO. The President of the Westphalian Savings Banks, Liane Buchholz, recently called for corresponding equity relief.
What Bürkle gives his successor at NordLB
With the 68-year-old Bürkle, one of the longest-serving bank managers in Germany is retiring. He gives courage to the potential offspring. “I can still recommend the job. Even if the standing of the banker has suffered in recent years, ”said Bürkle, referring to the consequences of the financial market crisis in 2008/2009. “Bankers deal with a wide variety of industries and banks are the main financiers of the national economy, especially in Germany.”
Nevertheless, the requirements for bank managers have of course changed in recent years. The regulation intervenes much more strongly in the management of a bank than before. The requirements of the supervision have grown. “That can already be seen from the agenda of board meetings,” says Bürkle.
Nevertheless, Bürkle understands university graduates who prefer to go to financial start-ups (fintechs) than to traditional banks. “We are no longer a classic growth industry. This hope already exists at fintechs, even if not all trees will grow into the sky. “
Bürkle will definitely approach the new year more calmly. However, he will continue to exercise his supervisory board mandates and in future be involved in various foundations that are committed to sustainability and the development of forests. Bürkle, who is an active hunter, also has a seat on the administrative board of the Lower Saxony State Forests. He will also continue his work on the board of the Kestner Gesellschaft, a traditional Hanoverian art association.
More: Savings banks and cooperative banks want to hold Schufa shares.