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November 10, 2008

HSH Nordbank CEO resigns

Hans Berger, the CEO of the world's largest provider of shipping finance, Germany's HSH Nordbank, has handed in his resignation.

"The Management Board failed to foresee the degree of intensity and duration of the crisis and the risks for the Bank's earnings that have come to light," he said. "Since the third quarter, writedowns and impairments on investments have exceeded the Bank's operating income. In spite of positive results in its core areas of business, the Bank will therefore post a negative result this year as a consequence of individual capital-market transactions and the general trend on capital markets. I take responsibility for this."

Dr. Wolfgang Peiner, Chairman of the HSH Nordbank Supervisory Board, stated: "The Supervisory Board and stockholders have accepted the offered resignation. I would like to thank Hans Berger for his many years of commitment to the Bank and its predecessor, Landesbank Schleswig-Holstein. His offer to resign testifies to his integrity and understanding of corporate responsibility."

The Chairman of the Supervisory Board and stockholder representatives will ask Prof. Dr. Dirk Jens Nonnenmacher to take over management of the Bank until further notice and will make a corresponding proposal to the Supervisory Board.

Prof. Dr. Nonnenmacher has been a member of the Management Board as Chief Financial Officer since October 01, 2007. In appointing Prof. Dr. Nonnenmacher, the Supervisory Board underlines the fact that the tasks of risk controlling and risk management have top priority against the backdrop of the crisis on the financial markets.

In addition, the Supervisory Board has commissioned the Bank's new auditor, KPMG, to review, together with Prof. Dr. Nonnenmacher, all major capital-market transactions with a view to their balance sheet risk over and above the normal audit of financial statements".

Dr. Peiner commented: "HSH Nordbank has a successful business model in place. It is no longer a conventional Landesbank, but a commercial bank with a clear strategic alignment. Its main focus is and remains on lending to North German companies and ship finance. Its profile was enhanced by the decisions taken by the Management Board and Supervisory Board in the summer of this year to concentrate on core areas of business and reduce costs as a reaction to the crisis on the financial markets. Clients and staff can depend on this strategy."

It is not known to what extent HSH Nordbank's problems relate to its shipping portfolio. It is also one of GermanyÕs top three banks for real estate; internationally it has also had a focus on the finance business involving top investors in the major property markets.

Mr. Berger's resignation comes after a November 3 decision by the bank to make partial use of the German governmentÕs package of measures aimed at stabilizing the financial market. It said it would ask for a guarantee facility totaling EUR 30 billion, saying around half of this amount would be "drawn down with a view to supporting the bankÕs successful business model" with the second half being used as a precautionary measure "in the event the turbulences on the financial markets make the coverage of further risks necessary."


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