“We’re focusing on good diversification”
Jens Thiele Global Head of Project Finance & Corporates and General Representative
The bank recently made its Corporates business much more international. Did this trend continue in 2023? Jens Thiele You could say that. At € 1.6 billion, we once again concluded more new business abroad than in Germany, where the figure was € 700 million, a good € 300 million more than in the previous year.
Which business areas are particularly attractive for the bank internationally? JT We have deliberately chosen to be active in various sectors, and we’re focusing on broad diversification. In general, we’re interested in financing business areas that are less dependent on economic trends. Moreover, the companies should have sufficient free cash flow to compensate for interest rate increases or economic downturns, for example. It was our strategy from the outset to do precisely this type of business, and it has proved to be the right approach. Since we started Corporates International in 2020, not a single customer has failed or defaulted – and that in turbulent times which have included Covid, rising interest rates and geopolitical tensions. Last year, for example, we concluded transactions in the healthcare sector, including the financing of an X-ray clinic. But we also had transactions in the services sector and with financial companies. Due to high inflation, rising interest rates and the public’s reluctance to purchase consumer goods, the bank has deliberately stayed away from areas that have direct contact with end customers. We don’t do automotive either, since it’s unclear how things will develop in this area in view of increasing vehicle electrification and changes in consumer behavior.
In which countries was the bank especially active? JT In the US, Scandinavia, the Benelux countries and the UK.
How was new business in Germany? JT At € 700 million, we’ve grown, both in terms of volume and earnings. I’m very pleased about that. We were particularly active in the factoring and leasing segments – including bicycle leasing. Interestingly, many of the transactions we concluded were outside our home market in the northern part of Germany. This shows that the bank has an attractive offering.
HCOB has invested a lot in payment transactions in recent years. Has this paid off? JT Yes. In 2023, we saw double-digit growth in commissions from transactions alone, and we gained a total of 500 new customers. The deposit business also did well, although this is of course largely due to the turnaround in interest rates. To become even better, we’ll continue to invest in our customer portal this year. We still have big plans in the payment transactions segment, and the same applies to our trade finance business, which is helped by our good rating.
The bank opened a branch in London in 2023. What is the significance of this? JT Proximity to the markets and customers is very important. You need local expertise, you need people who have been familiar with the markets for many years. We now have that in London. If you only operate from afar, it’s difficult to do good business.
What are the prospects for 2024? JT The year will be challenging both economically and geopolitically. In addition, I don’t yet see inflation easing in the long term, which could have a corresponding impact on interest rates and our customers’ cash flow. We’re aiming for new business totaling around € 2 billion. We’re open to doing new business and are looking forward to it – but are also approaching it with the necessary caution.