August 22, 2013 / 11:23 AM / in 4 years

HSBC to expand business with German midsize firms

DUESSELDORF, Germany, Aug 22 (Reuters) - HSBC plans to expand its business with midsize German companies, including through acquisitions, the bank’s Germany chief Andreas Schmitz said on Thursday.

The British lender will add more staff and products and is willing to take on more risk to ramp up lending to so-called Mittelstand companies, which form the backbone of the German economy, Schmitz said at a press conference.

Parent company HSBC is willing to inject capital to help build the business, although a capital increase for the German unit HSBC Trinkaus is not necessary for now, Schmitz said.

Duesseldorf-based HSBC Trinkaus would consider buying the corporate banking business of cross-town rival IKB if it was ever put up for sale, Schmitz said, adding “it’s worth a closer look”.

Schmitz clarified that HSBC did not want to bid for the whole of IKB, but was always on the lookout for opportunities to win more corporate banking business in Europe’s largest economy.

IKB became a high-profile casualty of the credit crisis and required several bailouts after its off-balance sheet investment vehicles ran into funding problems in 2007.

Following the rescues, IKB was taken over by state-controlled bank KfW, which in turn sold IKB to U.S. private equity investor Lone Star in 2008 for 137 million euros, a deal that included 9.5 billion euros in state-backed guarantees.

After restructuring the lender, Lone Star actively sought buyers, with the aim of striking a deal by the first quarter of 2011.

IKB’s owner has been in talks with French bank BNP Paribas about a sale, but the parties failed to strike a deal about who should take on the long-term liabilities.

Lone Star declined to comment on Thursday.

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