January 24, 2019 / 4:33 PM / in 6 months

Uncertainty over recapitalisation not hurting NordLB's business - CEO

BERLIN (Reuters) - Uncertainty about a capital increase for German public sector lender NordLB has not had a negative impact on business, the bank’s chief executive said.

NordLB needs to shore up its balance sheet by 3.5 billion euros (3.04 billion pounds) to cover writedowns on the value of sour ship loans and has been aiming for a solution by early February.

“We are well on our way,” Chief Executive Officer Thomas Buerkle told Reuters in an interview, conducted on Wednesday, when asked how the bank’s business was doing. “The operating business is doing very well.”

On the recapitalisation, he said he assumed that private investors would place bids by a deadline on Friday. The bank has attracted interest from buyout groups Cerberus and Centerbridge.

However, Buerkle also said he would be open for a solution involving public funds and savings banks.

German regional states and savings banks are nearing an accord to contribute more than half of the money needed for NordLB’s recapitalisation, a person close to the matter said on Wednesday.

The rest would come from stakeholder regional savings banks and the protection schemes of savings banks and landesbanks and

the agreement in principle was presented to the European Central Bank on Tuesday, according to the source.

NordLB is 65 percent owned by Lower Saxony and Saxony-Anhalt with regional savings banks holding the rest.

Reporting by Klaus Lauer; writing by Tom Sims; editing by Thomas Seythal and Susan Fenton

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