Deutsche Bank has acquired €1.67 billion ($1.78 billion) of loans from Norddeutsche Landesbank’s (NORD/LB) €2.75 billion ($2.9 billion) aircraft financing portfolio. NORD/LB has confirmed that the remaining part of the portfolio (around €1.1 billion) will remain in the NORD/LB Group and will be “gradually phased out”, while all new business activities in the segment will be discontinued.
Deutsche Bank stated: “The loans were acquired in a competitive bidding process, and are to a diverse range of lessors and airlines and secured by commercial passenger aircraft. Nord/LB’s current aircraft portfolio comprises around 300 financed aircraft and engines. The portfolio is being acquired by Deutsche Bank’s Global Credit Financing & Solutions (GCFS) business which has a diverse lending portfolio including renewable energy finance, energy transition finance, infrastructure and transportation finance, and asset backed financing.”
The bank added that the competitive bidding process for the loans ""attracted high demand, underlining the quality of the portfolio"". Both parties have agreed not to disclose the purchase price.
Completion of the purchase agreement is subject to approval by the antitrust authorities. The sale is expected to be finalised in the second half of 2024.
“This deal plays to our strengths and our deep experience in this sector. It is an opportunity for us to acquire high quality loans with an attractive return profile,” said Ross Duncan, co-head of the Global Transportation Finance team at Deutsche Bank.
NORD/LB has been active worldwide in the aircraft financing business for over forty years. The current aircraft portfolio comprises around 300 financed aircraft and engines.
NORD/LB commented that the sale was ""part of the strategic realignment"" of the bank, which it adds is ""focussing even more strongly on its core business areas following the successful transformation"".
""With the consistent implementation of our strategy, we are focussing on continuously increasing the bank's profitability,"" said Jörg Frischholz, CEO of NORD/LB. ""With this decision, we are now taking the next logical step and focussing even more on enabling the energy transition our growth areas such as renewable energies, commercial real estate and corporate customers, which we can strengthen with the capital released,"" Frischholz continued. ""We did not take the decision lightly, as the aircraft financing was an integral part of our business model for many years.”
As part of the implementation, NORD/LB commented that its employees working in the area of aircraft financing ""will be given the opportunity to move to equivalent positions"" within the bank. On behalf of the Board of Management, Frischholz expressly thanked the respective colleagues for their long-term service: ""Due to the dedication of our colleagues NORD/LB has been a high recognised and respected market player in this business segment for decades. They have combined professional expertise and passion for the business in an exemplary manner, making them excellent ambassadors of the bank in the aviation industry.”
Deutsche Bank acquires $1.78bn NORD/LB aircraft financing portfolio
