NORD/LB consolidates its market position in Saxony-Anhalt
NORD/LB Landesbank for Saxony-Anhalt has expressed satisfaction with the development of its business in the federal state. "We have further consolidated our market position in the region", as Dr. Hinrich Holm, member of the NORD/LB Managing Board, told journalists last Wednesday in Magdeburg. "We, in collaboration with the savings banks, have established ourselves as the premier address for financing solutions tailored to the specific needs of the regional SMEs". He added that 2013 and the first six months of 2014 not only generated pleasing results in the corporate business segment but also in NORD/LB's other spheres of activity in Saxony-Anhalt. This was particularly the case in agricultural banking and the financing of renewable energies. The slight drop of 1.5 percent in the bank's overall financing volume in Saxony-Anhalt was attributable to special effects in individual business segments, for example the improved financial situation among the municipal authorities.
NORD/LB's overall financing volume with customers based in Saxony-Anhalt stands at around EUR 4.2 billion. A further amount of approximately EUR 1.4 billion was accounted for by financing arrangements in Saxony-Anhalt with customers based elsewhere and which are therefore not represented in the federal state's statistics on financing business. This is the case, for example, with corporate customers in Saxony-Anhalt as members of a group headquartered in another federal state.
Expanded collaboration with savings banks
NORD/LB has further expanded its close collaboration with the regional savings banks in the sphere of corporate customer business among all sectors of Saxony-Anhalt's economy, with particular emphasis on providers, automotive component suppliers and the nutrition economy.
"Demand in corporate banking for alternatives to traditional bank credit, for example promissory note loans for SMEs, is steadily growing", said Dr. Holm. "By way of these products we are enabling our customers initial access to the capital market while easing our equity position at the same time." All in all, the competition in corporate banking has tightened somewhat of late, in part attributable to increasing activity in Saxony-Anhalt on the part of international financial institutions.
With Magdeburg as centre of operations in the residential housing segment for Germany as a whole, NORD/LB increased its overall business volume, exceeding the EUR 3.5 billion mark for the first time. The key projects in Saxony-Anhalt include two financing transactions in Magdeburg, involving the reconstruction of the Domplatz cathedral square and the modernization of the Hermann-Beims-Siedlung, an urban residential zone making up one of Germany's biggest heritage areas. The overall downturn of 10.3 percent in financing volume in Saxony-Anhalt is primarily attributable to a customer's extraordinary repayment of an individual commitment in the amount of EUR 80 million which was not compensated for by corresponding new business. This special effect also largely explains the slight decline in terms of NORD/LB's total financing volume in Saxony Anhalt.
2013 saw the business volume in the agricultural banking segment rise by almost one percent. While new business in the spheres of land purchases and investment in farm buildings remains at a consistently high level, the volume in terms of renewable energies fell slightly. However, demand for financing in this area of activity has since risen again in the run-up to the anticipated amendment of Germany's Renewable Energies Act, given the general expectations of a worsening of the conditions for obtaining government subsidies. All told, NORD/LB is expecting further slight growth of the agricultural banking financing volume in 2014.
The reason for the downward trend (-18.0 percent) in the financing volume in the public customers segment lies not only in an improved situation in terms of revenues among the municipalities but also in the "STARK" programme imposed by the state government of Saxony-Anhalt to provide support for municipalities looking to reduce their indebtedness. This development has had the result of markedly reducing the demand for loans among public customers.
NORD/LB's business with savings banks and institutional customers grew by 20.7 percent in 2013. Fluctuations in volume in this area of operations are to a significant extent the result of short-term money market transactions on the part of individual institutions, though it should also be noted that the market situation is generally characterized by the extremely low interest rate levels.
Business in the energy and infrastructure customers segment in 2013 in Saxony-Anhalt included two major projects involving wind farms, namely the Fischbeck facility in the administrative district of Stendal and the Jeetze facility in the district of Altmark Salzwedel, with financing volumes of between EUR 20 and 25 million. In this segment too, NORD/LB has further intensified its collaboration with the savings banks. There are currently three further wind farm financing projects in the pipeline.
As institution of NORD/LB and the federal state's central development bank, the Saxony-Anhalt Investment Bank (IB) stayed on course and continued its positive trend too in the tenth year since its inception. As IB head of department Stefan Töbermann emphasized: "The IB approved over 5,800 applications in 2013 – in all almost EUR 424 million for subsidies and EUR 260 million for loans. We attach particular importance to ensuring that our customers are given access to all consultancy, subsidy and financing offerings on the most transparent and uncomplicated basis possible. In particular the possibilities of financing under the SME loans fund have proven themselves as offerings supplementing those of the relationship banks. "This enables advance financing of orders, realization of investments or the development of new and innovative product ideas", added Mr. Töbermann.
BUSINESS DEVELOPMENT OF NORD/LB LANDESBANK FOR SAXONY-ANHALT IN 2013
|31.12.2013 (Mio. Euro)||31.12.2012 (Mio. Euro)||Change (%)|
|Overall financing volume||4.207||4.272||-1,5|
of which residential housing business
of which agricultural banking
|Savings banks and institutional customers||1.137||942||20,7|
|other spheres of activity (including energy and infrastructure customers)||504||513||-1,8|
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