Hamburg Commercial Bank (HCOB) has agreed to sell its aviation finance portfolio to Deutsche Bank, HCOB said on Thursday (October 2).
The portfolio consists exclusively of performing loans worth around $450 million. It is understood that the portfolio mainly included midlife non-recourse aircraft financings, along with some engine and regional aircraft financings. According to a HCOB factsheet published in August, the portfolio comprised 11 financings.
“This transaction sharpens our business model and allows us to focus on our core franchises in Corporates, Shipping, Project Finance, and Commercial Real Estate,” said Luc Popelier, CEO of HCOB.
“We would like to thank our clients in the aviation sector for their trust and valued partnership. We are confident that, with Deutsche Bank, we have found a highly suitable financing partner for them.”
HCOB sold the portfolio as part of a multi-stage bidding process that attracted broad market interest. Airline Economics understands that a teaser was sent out to over 30 investors, with a large majority of investors that showed interest making a bid in the first round.
A person familiar with the process said competition was high, given the portfolio’s diversified client base and risk profile. Although it had taken HCOB over a year to assemble the book, Deutsche Bank was able to secure the assets within a few months of bidding.
The portfolio’s size was also seen as a selling point — large enough to be a meaningful transaction, yet still manageable.
HCOB Aviation Capital will be discontinued as the bank exits aviation finance, and the dedicated team will not transfer to Deutsche Bank, which is purchasing the loans, not the business. As a major institution, Deutsche Bank is not expected to take on many new clients through the deal.
HCOB’s aviation arm had only been launched in late 2023 by structured finance industry veteran Richard Moody, but the bank is now streamlining operations to focus on corporate clients in Germany and Europe.
In addition to winding down aviation, HCOB will cease operations in international real estate financing and a few other areas.
The restructuring reflects the interests of HCOB’s private equity owners, Cerberus and J.C. Flowers, who are positioning the bank for a potential sale.
The changes are being driven by new CEO Popelier, who joined in September 2024 to lead the streamlining of the business.
The transaction with Deutsche Bank is expected to close by the end of October.