July 14, 2018 / 10:33 AM / 9 months ago

Germany's NordLB targets new capital plan by end of 2018 - chairman

BERLIN (Reuters) - German public-sector bank NordLB expects to find a solution by the end of the year on how to increase its capital, its chairman told Reuters, as the bank restructures its balance sheet following heavy write-downs on bad ship loans.

“We’re still considering all kinds of options,” said Reinhold Hilbers, who is also finance minister of the German state Lower Saxony. “If we take a partner on board it would be our aim to have someone for a reliable, long-term cooperation.”

The bank turned a small profit last year after losing a record 2 billion euros (1.77 billion pounds) in 2016. The bank’s majority owner, the German state of Lower Saxony, has ruled out a complete sale.

The bank and its shareholders want to restructure the bank in way which avoids breaching European Union state aid rules, as this could force a complete sale.

NordLB peer HSH Nordbank , once the world’s largest ship financier, was sold this year to buyout groups on EU demands, after crippling writedowns and repeated state bailouts.

Both lenders have been dragged down by their exposure to the shipping industry, which has been going through its worst slump on record, although the first signs of recovery have emerged in recent months.

Reporting by Klaus Lauer; Writing by Arno Schuetze; Editing by Edmund Blair

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