NordLB is considering options for its €3 billion ($3.2 billion) aviation financing portfolio, people with knowledge of the matter said.
(Bloomberg) — NordLB is considering options for its €3 billion ($3.2 billion) aviation financing portfolio, people with knowledge of the matter said.
The German lender is working with advisers as it weighs a partial or full sale of the business, according to the people, who asked not to be identified discussing confidential information.
One of Germany’s so-called Landesbanks, NordLB had to be rescued in 2019 with a €3.6 billion aid package after it was hit by soured loans to the shipping industry. While the bank has been winding down its shipping portfolio, it has maintained its business with the aviation sector.
But NordLB’s business with aircraft customers has dragged on profitability in recent years. The bank’s exposure to aviation financing is valued at €3 billion, according to an August presentation. Its portfolio includes 278 aircraft and 46 engines, as well as loans for airlines and leasing companies.
Deliberations are ongoing and there’s no certainty NordLB will decide to sell any of the aviation finance business, the people said.
“As part of its usual strategy process, NordLB is also reviewing various options for the bank’s aviation business,” a NordLB spokesperson said. “This process takes place every year.”
Earlier this year, UK lender Standard Chartered Plc agreed to sell its aviation finance business to a unit of Saudi Arabia’s sovereign wealth fund and inked a separate deal to offload loans as part of efforts to boost returns.
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