April 17, 2018 / 9:06 AM / 8 days ago

REFILE-NordLB open to new investors as restructuring talks continue

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FRANKFURT, April 17 (Reuters) - German public-sector bank NordLB posted 135 million euros ($167 million) in 2017 net profit, up from a record 2 billion loss a year earlier, as it mulls ways to restructure its balance sheet, the lender said on Tuesday.

“The considerations to refine the business model and to strategically and organisationally realign the group include the option to open up the bank for private capital”, NordLB said in a statement.

NordLB’s owners are looking at options including a cash injection of more than 1 billion euros, according to people familiar with the matter. The bank’s majority owner, the German state of Lower Saxony, has ruled out a complete sale.

The bank and its shareholders want to restructure the bank in way which avoids breaching European Union state aid rules, as this could force a complete sale of the bank.

NordLB peer HSH Nordbank, once the world’s largest ship financier, was earlier this sold to buyout groups on EU demands year, after crippling writedowns and repeated state bailouts.

Both lenders have been dragged down by their exposure to the shipping industry, which has been going through its worst slump on record, although first signs of recovery have emerged in recent months.

NordLB said it aims to post a net profit this year and to increase its capital ratio to 13 percent from 12.2 percent at the end of 2017. ($1 = 0.8068 euros) (Reporting by Arno Schuetze Editing by Edward Taylor)

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