NORD/LB initiates next phase of Group transformation
- Reorganisation of lending processes and management support functions is to enable 430 posts to be eliminated
- Reserves are likely to lead to a negative result for 2018
The NORD/LB Group restructuring is entering the next phase. In November the Bank will initiate a further wave of voluntary staff reductions as part of its One Bank transformation programme. By streamlining internal lending processes and management support functions, some 430 posts are to be eliminated Group-wide by the end of 2020. As a result of the synergy effects achieved through the merger with the former Bremer Landesbank in the first phase that began in 2017, another 420 positions are being cut – primarily at the Bremen and Oldenburg locations.
A total of about 1,250 posts are to be eliminated throughout the Group by the end of 2020. “The start of the second phase in November means we are right on schedule,” said NORD/LB Chairman of the Managing Board Thomas Bürkle. The staff cuts will be implemented in the form of voluntary early retirement schemes and redundancy plans. This plan of action is based on a future safeguarding agreement which the Bank concluded with the staff representative body to avoid compulsory redundancies.
During the second phase of staff reductions, the Bank will need to create provisions at the expense of the restructuring result which will negatively impact earnings for the current financial year. In addition to a negative market impact, these provisions are likely to result in negative earnings for the NORD/LB Group for the full financial year 2018. At this point however, the numbers cannot be reliably determined. “Our One Bank transformation programme will make our Bank more efficient and future-proof. The outlays we have to make now will pay off in the medium and long term. Consistently repositioning the Bank at the capital, risk and cost levels is our top priority, and takes precedence over posting a positive result for this year. All the decisions we make today are based on our vision of the future,” stressed Thomas Bürkle.
J.P. Morgan and Houlihan Lokey advise on investor meetings
Work on the fundamental transformation of the Bank is also progressing. During discussions with potential investors, NORD/LB is advised by investment banks J.P. Morgan and Houlihan Lokey. NORD/LB and its owners are currently working on a comprehensive plan to boost the Bank’s capital ratios and are also looking into the possible involvement of external investors. No decision has been taken as yet, but the Bank is testing the waters in terms of what the possible conditions of such a step might be.
With total assets of € 159 billion, NORD/LB Norddeutsche Landesbank is one of Germany’s leading merchant banks. Its core business segments include structured finance in the energy and infrastructure sector, ship and aircraft finance, corporate client business, commercial real estate finance, capital market business and private and commercial client business including private banking. The Bank has its head office in Hanover, Braunschweig and Magdeburg. NORD/LB also has branches in Bremen, Oldenburg, Hamburg, Schwerin, Düsseldorf, Munich and Stuttgart. Outside Germany, NORD/LB is active in Luxembourg with a covered bond bank (NORD/LB Covered Bond Bank) and also has offices in London, New York, Singapore and Shanghai.
NORD/LB Media and Communication