Protection scheme of the German savings banks finance group
HSH Nordbank is a member institute of the German Savings Banks Finance Group.
The German Savings Banks Finance Group has an institutional protection scheme. This scheme protects deposits held at a savings bank (Sparkasse), a federal state bank (Landesbank) and a federal state building society (Landesbausparkasse).
There has not been a single case of default by a member institution since the formation of the protection scheme in the 1970s. No customer within the Savings Banks Finance Group has lost his deposit nor related interest so far.
This scheme consists of 13 protection independent schemes:
- 11 savings banks guarantee funds of the regional savings bank associations,
- the security reserve of the Landesbanken and central giro institutions and
- the guarantee fund of the central building societies.
These independent protection schemes have been consolidated in an institutional protection scheme of the German Savings Banks Finance Group in order to maximize the protection available to safeguard an institution in the event of a crisis.
The German Deposit Guarantee Act (EinSiG) entered into force in Germany on 3rd July 2015. The law transposes the relevant EU Directive. The Savings Banks Finance Group realigned its proven guarantee scheme to these statutory requirements which is recognised as a deposit guarantee scheme under EinSiG.
1. Voluntary institutional protection scheme
The objective of this scheme is to protect the member institutions themselves and to avert imminent or existing financial difficulties at these institutions. To achieve this, the protection scheme can, for example, contribute new liability funds, provide guarantees or sureties vis-à-vis third parties or even satisfy third-party claims. These measures may be combined. This is designed to rectify the problems faced by the institution in question and to avoid a bank resolution with regard to the SAG [Sanierungs- und Abwicklungsgesetz (Bank Recovery and Resolution Act)].
The protection scheme has set up a risk monitoring system with corresponding organisational structures for preventative purposes. This system helps imminent financial difficulties to be identified early on/to prevent such difficulties from arising in the first place, and allows suitable counter-measures to be taken. In this way the triggering of a deposit guarantee event (see 2.) should be avoided so that the business relationships with the clients can be continued as contractually agreed.
All the securities (not of an equity / regulatory capital nature, especially in accordance with recital 41, 44 of the EU Commission’s Communication 2013/C 216/01 of 30 July 2013 [Banking Communication („Bankenmitteilung“)]) that HSH Nordbank AG has issued will therefore continue to fall under the institutional protection of the guarantee system of the Savings Banks Finance Group (Art. 39 (1) of the statutes).
2. Statutory deposit guarantee
In case the German Federal Financial Supervisory Authority ascertains a compensation case in accordance with EinSiG (e.g. if the voluntary institutional protection scheme has failed averting financial difficulties at a credit institution), the customer has a claim against the deposit guarantee scheme for the repayment of his deposits up to EUR 100,000. This compensation shall be paid within seven working days.
More information under
Decision of the EU on HSH Nordbank
Against the backdrop of the agreement in principle recently reached with the EU Commission, HSH Nordbank will remain in the Savings Banks Finance Group during the sale process. All the securities (not of an equity / regulatory capital nature, especially in accordance with recital 41, 44 of the EU Commission’s Communication 2013/C 216/01 of 30 July 2013 [Banking Communication („Bankenmitteilung“)]) that HSH Nordbank AG has issued will therefore continue to fall under the institutional protection of the guarantee system of the Savings Banks Finance Group (Art. 39 (1) of the statutes).
Should the membership of HSH Nordbank in the Savings Banks Finance Group end at a time as yet unknown, membership of the protection system of the Savings Banks Finance Group will, pursuant to Art. 94 (4) of the statutes, continue to apply for a further two years.
Maintenance and Guarantee Obligation
An understanding regarding state guarantees Maintenance and Guarantee Obligation was reached between the EU Commission and the German federal government on July 17, 2003. This stipulates that Maintenance Obligation should be transformed into a market-based ownership relationship and that Guarantee Obligation should be abolished. A transitional period of four years until July 18, 2005 for full implementation was agreed upon. A grandfathering clause is provided for all commitments made prior to or during the transitional period.
The following overview contains important information on the Brussels agreement:
||Maturity of Liabilities|
|Date of Issuance||Up to July 18, 2005|| July 19, 2005 to
Dec 31, 2015
|After Dec 31, 2015|
|Up to July 18, 2001|| Maintenance &
|Guarantee Obligation||Guarantee Obligation|
| July 19, 2001
to July 18, 2005
| Maintenance &
|Guarantee Obligation||No Guarantee|
|After July 18, 2005||
||No Guarantee||No Guarantee|
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Under the institutional liability (Anstaltslast) the owner shall protect the bank’s economic basis, to keep it operational for the entire duration of its existence and to make up for possible shortfall by subsidies or other suitable means. The guarantee obligation (Gewährträgerhaftung) obliges the guarantor to indemnify the creditors in case of an insolvency or liquidation of the bank. It gives creditors a direct claim against the guarantor and can only be invoked if the bank’s assets are insufficient to satisfy the creditors. The guarantee obligation is neither limited in amount nor in time.
Maintenance and Guarantee Obligation (Anstaltslast and Gewährträgerhaftung) for HSH Nordbank AG
The state of Schleswig-Holstein and the City of Hamburg ratified a state treaty which stipulates that guarantee obligations are also valid for HSH Nordbank to the same extent, that is, as these obligations were valid for the previous bank entities, Hamburgische Landesbank and LB Kiel. (Art. 2 Liability for HSH Nordbank AG liabilities).