FRANKFURT, June 3 (Reuters) - The European Commission will likely decide by early 2015 whether the bailout of German lender HSH Nordbank complied with state aid rules, one of its public-sector owners said.
“The outcome of the proceedings will essentially depend on the viability of HSH’s business model,” Monika Heinold, finance minister of the German state Schleswig-Holstein said. “Despite all reservations I am cautiously optimistic that it will prove it has one.”
In June 2013, the European Commission gave temporary approval to a total of 10 billion euros ($13.6 billion) in state aid to the so-called landesbank from its majority shareholders.
As part of an earlier bailout approval - HSH in 2013 gave back some state guarantees but later asked for an increase to the original 10 billion - the European Commission had ordered HSH to sell some activities and drastically reduce its balance sheet.
Schleswig-Holstein and the city of Hamburg together own 85.4 percent of HSH, while local savings banks own 5.3 percent and investor J.C. Flowers holds 9.3 percent.
HSH is expecting to post pretax earnings of more than 200 million euros in the first quarter, up from 71 million euros in the year-earlier period, Heinold told Reuters.
“HSH is well prepared for the European Central Bank’s asset quality review and the stress test that the ECB and the European Banking Authority are carrying out at the 124 most important European lenders,” Heinold said. ($1 = 0.7349 Euros) (Reporting by Jan Schwartz; writing by Arno Schuetze)