Breaking News

Apple First-Quarter EPS $3.06 vs. Estimate of $2.60

HSH Nordbank Guarantee-Increase Approved by EU Pending Probe

HSH Nordbank AG, the world’s largest shipping lender, won provisional approval from the European Commission for the restoration of a 10 billion-euro ($13.2 billion) guarantee from the German states of Hamburg and Schleswig-Holstein, pending an in-depth probe into the measure.

The Brussels-based commission said it will investigate whether the plan to increase the guarantee from 7 billion euros is in line with European Union state-aid rules.

“The commission has doubts about whether, given changed market circumstances, the restoring of the guarantee is still covered by its earlier decision and whether it is appropriate,” it said in an e-mailed statement today. During the principal investigation procedure, it “will examine in detail to what extent the measure is compatible with the aid rules.”

Hamburg and Schleswig-Holstein, which control the bank, welcomed the preliminary approval, saying it will strengthen HSH Nordbank’s capital ratio and give the lender more time to restructure its business.

HSH Nordbank is trying to reduce bad loans to shipping clients struggling to service their debt amid a slump in demand, overcapacity of vessels and low freight rates that is crippling operators.

Shipping loans make up 27 billion euros of the lender’s 125 billion-euro portfolio, Chief Executive Officer Constantin von Oesterreich said on May 21.

To contact the reporter on this story: Peter Chapman in Brussels at

To contact the editor responsible for this story: Anthony Aarons at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.