FRANKFURT, April 26 (Reuters) - HSH Nordbank, which is in the midst of a sale to buyout groups Cerberus and J.C. Flowers, posted a 2017 pretax loss of 453 million euros ($551 million) on writedowns of bad ship loans.
The state-backed lender said on Thursday that it took a 1.1 billion charge when selling its remaining 6.3 billion euros in non-performing loans to the buyers of the bank in a separate transaction.
“This means that on the completion of privatisation, expected in the second or third quarter, the bank will be almost completely free from its legacy assets,” HSH said in a statement, adding that its non-core bank will be dissolved.
The German states of Hamburg and Schleswig-Holstein bailed out HSH with 3 billion euros in equity and a 10 billion-euro guarantee — which the bank is drawing fully — after risky investments turned sour and the shipping industry witnessed its worst slump on record.
The states have said that total losses they incurred in their HSH investment would range from 10.8 billion to a maximum of 14 billion euros.
Despite shipping markets showing slight recovery trends in recent months, they remain challenging, HSH said, adding that it only handed out new ship loans worth 500 million euros last year. ($1 = 0.8224 euros) (Reporting by Arno Schuetze Editing by Edward Taylor)