Hamburg Commercial Bank (HCOB), a private commercial bank based in Hamburg, Germany, announced on Thursday the launch of a new Aviation Finance division. The move is part of its ongoing diversification strategy. The addition of this new business will complement the bank's existing financing activities in real estate, shipping, project finance, and corporate business. The bank is a pioneer in pan-European project financing of renewable energies and digital infrastructure. It also offers individual solutions for the global aviation sector and for German and international corporate clients.
HCOB has enlisted industry specialist Richard Moody as Managing Director and Global Head of Aviation. Moody brings with him extensive structured finance and capital markets experience. He will be responsible for establishing and building the new business. Before joining HCOB, Moody served as Chief Investment Officer at Cranfield Aerospace Solutions. His career also includes a 15-year tenure at Deutsche Bank (ETR:DBKGn) where he held several senior leadership roles in transportation and infrastructure financing, lastly serving as Global Head of Transportation Finance and Chair of the Global Transportation Finance Investment Committee.
Christopher Brody, Chief Investment Officer of Hamburg Commercial Bank, expressed his confidence in Moody's (NYSE:MCO) ability to successfully build the aviation finance business. He emphasized that HCOB’s focus on niche markets and diverse asset classes and regions is bolstered by their long history in providing financing in commercial real estate, shipping, renewable energy, and infrastructure sectors.
In his new role at HCOB, Moody aims to construct a best-in-class aviation finance business. He highlighted the need for supporting the broader aviation industry with thoughtful and committed capital as it continues its post-COVID recovery and aligns with global decarbonization efforts.
The bank's financing support will extend to lessors and airlines with structured asset-backed solutions. It also plans to finance the broader aviation ecosystem including flight training, slots, gates, maintenance facilities, and aviation supply chains. As part of its strategy, HCOB will selectively invest in capital market products. The new aviation business will be integrated within the bank's overall sustainability approach.
According to InvestingPro data, the Hamburg Commercial Bank has a market capitalization of 12706.77M USD and a P/E ratio of 7.55, indicating a low price relative to its earnings. Its revenue for the last twelve months (LTM2023.Q2) stands at 9845.05M USD, marking a growth of 6.04%. The bank's operating income, adjusted for the same period, is 2819.73M USD, reflecting an operating income margin of 28.64%.
InvestingPro Tips also provide some insights into the bank's financial health. Two analysts have revised their earnings upwards for the upcoming period, indicating a potentially favorable financial outlook. The bank is also trading at a low Price / Book multiple, suggesting that it may be undervalued. On the other hand, analysts have noted that the bank is quickly burning through cash, which could be a concern for potential investors. Despite this, they predict that the company will be profitable this year. For more information and tips, visit InvestingPro.
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