Bank Reviews Massive Structured Finance Portfolio
Bankgesellschaft Berlin, at one time one of Europe's largest asset-backed investors with more than E4 billion in structured finance holdings, is performing a strategic review of its portfolio to determine the portfolio's future size and asset allocation.
Bankgesellschaft Berlin, at one time one of Europe's largest asset-backed investors with more than E4 billion in structured finance holdings, is performing a strategic review of its portfolio to determine the portfolio's future size and asset allocation. In the meantime, it has dramatically scaled back its acquisitions of new securities. Viktor Schneider, head of securitization at BGB in Berlin, says no decisions have been made, but stresses that the bank is still a long-term ABS investor. He declined to quantify the portfolio's size.
The review comes amid rumors that BGB is planning to sell its ABS holdings. The rumor began to circulate after some high-profile personnel departures last year. Such rumors hold particular weight in Europe, where market participants are familiar with large-scale liquidations having experienced Abbey National's well-publicized liquidation of its structured finance portfolio last year.
Several structured finance pros from BGB have resigned in recent months. Harald Berlinicke, who had been head of ABS and CDO investments at BGB, is the firm's most-recent departure. He joined TD Securities in London as a v.p. and director of credit product sales.
Earlier last year, Zoe Shaw, managing director of debt financing who supervised ABS investments, left the firm (BW, 6/9). And Gerwin Scharmann, who was head of portfolio finance for ABS, has also since left BGB and joined ABN AMRO.
BGB's Schneider acknowledges the bank has been participating in the ABS market only on a limited basis of late, but denies that it is selling off its portfolio entirely and pulling out of the market. He says several broader issues need to be resolved before the bank makes a decision on its structured finance investments, including the outcome of a European Union investigation into the city of Berlin's injection of capital into BGB as a whole. The German capital owns a majority stake in the bank.