Frankfurt, Berlin The sale of the Sparkasse real estate financier Berlin Hyp is currently the number one topic of discussion in the public finance sector. The decision as to who will be awarded the contract for the institute from the federal capital is setting the course for the further development of the Sparkassen-Finanzgruppe.
According to insiders, which bidder wins in the end will not only depend on the price offered, but also on strategic considerations. “It’s a punch and a stab,” says a person familiar with the process.
Insiders assume that the bids are close together and amount to more than one billion euros – the savings banks would probably not sell Berlin Hyp for less. There is no hard deadline for a sale. However, the aim is to make a decision by the end of the year.
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Berlin Hyp has equity of 936 million euros. In addition, there is 600 million euros in a fund for general banking risks. In addition, the institute is on a growth course, has recently expanded its profits and is considered a pioneer in important topics such as sustainability and digitization.
“Berlin Hyp is a jewel in our group,” said Helmut Schleweis, President of the German Savings Banks and Giro Association (DSGV), in a recent interview with Handelsblatt. For him, therefore, only a sale within the public finance sector is an option.
Many of those involved see Deka as a favorite – primarily due to its ownership structure. Like Berlin Hyp, the fund provider is 100 percent owned by the savings banks. The holdings of the individual houses in Deka and Berlin Hyp are not identical, but very similar.
In addition, the business of Deka and Berlin Hyp is complementary to each other. In contrast to a combination with Helaba or LBBW, there are only a few overlaps. Deka makes around 80 percent of its real estate financing abroad and focuses primarily on large-volume deals in markets such as Great Britain and the USA. Berlin Hyp, on the other hand, does 70 percent of its business in Germany.
“If it were up to the logic, Deka would have to get the job,” says one person involved in the process. “But we all know that logic in the Sparkassen-Finanzgruppe is not always the decisive factor.”
The Sparkasse President has been fighting for a consolidation of the top public-law institutions for years – so far, however, with manageable success.
(Photo: dpa)
Critics of a combination of Deka and Berlin Hyp are of the opinion that such a merger would dilute Deka’s profile as the securities house of the savings banks too much. You also point out that Helaba could achieve greater synergies in the real estate business than Deka in the event of a takeover of Berlin Hyp.
Like Berlin Hyp, Helaba is heavily involved in S-Group business with the Sparkassen. In the real estate sector, both institutes offer the savings banks the opportunity to jointly handle financing that is too large for individual houses. They can also participate in various forms of real estate financing from Berlin Hyp and Helaba. This is of great importance for savings banks, which often have more deposits than they can suffice in the lending business.
Helaba has currently financed real estate with a volume of around 38 billion euros and is significantly larger in this area than Deka, which only has eleven billion euros. A takeover of Berlin Hyp would add another 25 billion euros. Some of those involved therefore warn of a real estate cluster risk should Helaba be awarded the contract. Finally, the Frankfurt-based company also has the real estate subsidiary GWH, which manages almost 50,000 residential units in Germany.
Helaba wants to push ahead with the consolidation of the sector
The majority of Helaba is owned by the Sparkassen in Hesse and Thuringia. In addition, savings banks from other regions as well as the states of Hesse and Thuringia are involved.
The institute has long been advocating mergers among top public law institutions, thus justifying its interest in the Berlin real estate financier. “A purchase of Berlin Hyp would be a very interesting option for Helaba, both economically and strategically, and a further step towards consolidation within the Sparkassen-Finanzgruppe.” Deka, LBBW and DSGV did not comment on the bidding contest.
DSGV President Schleweis also considers mergers to be indispensable. In the end, from his point of view, there should be a central institution in which all Landesbanken, Deka and Berlin Hyp are united. However, there is resistance to the plans of the DSGV boss within the savings bank group and also in politics. Schleweis has therefore given up his hope of a timely merger of Deka and Helaba.
The sale of Berlin Hyp, which only has a balance sheet total of 35 billion euros, would not be a big hit in the consolidation of the sector. But at least Schleweis could then make a little progress on his heart issue.
Should Helaba or Deka win the contract, institutions that are wholly or majority owned by the Sparkassen would be strengthened. The winner of the bidding competition would also be predestined to take a leading role in further consolidation of the sector.
The head of LBBW does not find the previous plans for the creation of a central Sparkasse institute convincing.
(Photo: dpa)
For this reason, the Stuttgart-based LBBW are only given outsider opportunities in the race for Berlin Hyp. LBBW does not believe in the central institute propagated by Schleweis. “I have not yet seen a convincing concept that I can recommend to my owners,” said CEO Rainer Neske last week.
In addition, the savings banks only hold 40 percent of LBBW. The remaining shares are held by the state of Baden-Württemberg and the city of Stuttgart, which sometimes have different interests than the savings banks. “If LBBW wins the contract for Berlin Hyp, that would be a clear sign that the central institute is finally dead,” says an insider.
Berlin Hyp is currently part of Landesbank Berlin Holding together with Berliner Sparkasse. The savings banks want to dissolve this holding, among other things because of the demand of the financial supervisory authority for a more stringent management of the group companies.
In addition to a sale, the savings banks are also looking into continuing Berlin Hyp as an independent institute. This is a realistic option that should not be lost in the debates about potential buyers, said several people familiar with the talks. Even if there is no agreement on a buyer within the Sparkassen Group, it would probably come down to this solution.
For DSGV President Schleweis, who has been campaigning for a consolidation of the sector for years, a vote against a sale would be a setback, emphasizes one participant. “Then everyone would be damaged.” In addition, some savings banks would like to see money – and that only happens when Berlin Hyp is sold and not when Berlin Hyp continues to operate as an independent institute.
More: Interview with Sparkasse President Schleweis: “Inflation destroys wealth every day.”