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NORD/LB needs to raise capital buffers, says CEO

Norddeutsche Landesbank Girozentrale CEO Thomas Bürkle said the German lender's business model necessitates a common equity Tier 1 ratio of at least 13%, up from the current 12%, Reuters reported Dec. 6.

Reinhold Hilbers, finance minister of the German state of Lower Saxony, which alongside Saxony-Anhalt owns 65% of the bank, said an injection of capital by the states was not planned, according to the report, which noted that any such injection would draw EU scrutiny. Rather, he said, it "remains our goal" that the bank generates the capital on its own.

Bürkle said NORD/LB expects to decide in January 2018 whether to sell unit Deutsche Hypothekenbank AG and added that he is looking for further synergies after the full takeover of Bremer Landesbank Kreditanstalt Oldenburg-Girozentrale earlier in 2017.

NORD/LB aims to break even in 2017 following a loss of about €2 billion in 2016. It also looks to cut its current €9 billion book of nonperforming ship loans to €5 billion by 2019-end.

Bürkle said NORD/LB has an understanding of how to manage shipping loans and could offer that expertise to fellow landesbank HSH Nordbank AG should the privatization of the latter fall through. But he noted that NORD/LB has no excess capital, suggesting that it could not step in to acquire long-struggling HSH Nordbank.