Sunday 5 October 2025
HCOB sells loan portfolio to Deutsche Bank as it winds down
Hamburg Commercial Bank AG (HCOB) has agreed to sell an aviation loan portfolio to Deutsche Bank worth approximately $450 million. The sale is part of HCOB’s planned exit from aviation, which was first reported back in April, less than 18 months after the bank launched its aviation desk (see Insight: “Alt lenders' margins continue to tighten in Q1, HCOB exits aviation finance”).
HCOB sold the portfolio as part of a multi-stage bidding process that attracted broad market interest. Ishka understands that volofin and MUFG were the other two bidders on the portfolio. The transaction is expected to close at the end of October.
HCOB had proved itself to be a nimble and active lender in a very short space of time. The bank was open to using its balance sheet in a wide range of structures, from bridge financing, PDP loans, and mezzanine financing, to investing directly in ABS and EETCs, and asset types from mid-life narrowbodies to freighter conversion financing.
The bank’s aviation division was profitable (and all of the loans being sold are performing according to HCOB), but it appears that aviation did not fit with the bank’s new strategic focus on Germany and Europe. The review was linked to the bank’s plans for an eventual sale by its PE owners. This resulted in the bank exiting certain businesses, including international real estate and aviation, but not rail or shipping. This view appears to now be publicly echoed by the bank itself.
“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, HCOB’s CEO, last week, explaining the context of the sale
HCOB’s aviation desk was set up in October 2023 by Richard Moody, the former Global Head of Transportation Finance at Deutsche Bank. Last week, aviation alt lender Ashland Place announced it had hired HCOB’s former senior director of aviation finance, Sarah Conway, as director to help strengthen the firm’s global origination capabilities and presence in Europe. The alt lender achieved record pricing on its second aircraft loan ABS last week (see Insight).
The Ishka View
There is some irony in watching Deutsche Bank successfully acquire HCOB’s loan portfolio, built by Richard Moody, the bank’s former global head of transportation, and his team. But it is also a logical move by Deutsche Bank, which talks to current market conditions. In a competitive market in which the number of financing opportunities has remained constrained, it is difficult for banks to significantly expand their loan books; acquiring a portfolio offers lenders scale quickly.
It also talks to the strength of the aviation finance market, that loan portfolios like this are not often offered for sale, which also explains the level of interest. Alt lender volofin and aviation bank MUFG were both rumoured to be in the bidding process for the portfolio. For volofin the acquisition, if successful, would have increased the size of their manged loan book, with likely some potential to include some facilities in a future loan ABS offering. HCOB always billed itself as being between an alt lender and a bank in its risk appetite. Among all the bank lenders, MUFG and Deutsche Bank appear to adopt a more asset-focused approach compared to other lenders and appear to be open to financing older assets. The respective bid for HCOB’s portfolio confirms that perception.
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