FINANCIAL INSTITUTIONS

CREDIT OPINION9 July 2019

Update

RATINGS

Hamburg Commercial Bank AGDomicile Hamburg, Germany

Long Term CRR Baa2

Type LT Counterparty RiskRating - Fgn Curr

Outlook Not Assigned

Long Term Debt Baa2

Type Senior Unsecured - FgnCurr

Outlook Stable

Long Term Deposit Baa2

Type LT Bank Deposits - FgnCurr

Outlook Stable

Please see the ratings section at the end of this reportfor more information. The ratings and outlook shownreflect information as of the publication date.

Analyst Contacts

Bernhard Held, CFA +49.69.70730.973VP-Sr Credit Officerbernhard.held@moodys.com

Mark C Jenkinson +44.20.7772.5432Associate Analystmark.jenkinson@moodys.com

Alexander Hendricks,CFA

+49.69.70730.779

Associate Managing Directoralexander.hendricks@moodys.com

Hamburg Commercial Bank AGUpdate to credit analysis

SummaryWe assign Baa2(stable)/P-2 deposit and Baa2(stable) senior unsecured debt ratings toHamburg Commercial Bank AG (HCOB). We also assign a ba2 Baseline Credit Assessment(BCA) and Adjusted BCA, as well as Baa2/P-2 Counterparty Risk Ratings (CRRs) to HCOB.

HCOB's current ratings reflect (1) its ba2 BCA and Adjusted BCA; (2) the result of ourAdvanced Loss Given Failure (LGF) analysis, which provides three notches of rating upliftfor senior unsecured debt and deposits; and (3) our low government and affiliate supportassumptions, which result in no rating uplift.

HCOB's ba2 BCA reflects the bank's strong capitalisation, which we expect to underpin itsfinancial profile throughout the bank's transition process out of the public-sector Sparkassen-Finanzgruppe (S-Finanzgruppe, Aa2 stable, a21). At the same time, HCOB benefits fromreduced organisational complexity and an improved asset quality, following the sale ofunderperforming legacy exposures to a separate special-purpose vehicle and the earlytermination of the prior owners' asset guarantee as part of the bank's privatisation. Theba2 BCA also incorporates our view that diversifying funding sources and extending bondmaturity profiles will be key medium-term challenges for the bank's financial profile.

Exhibit 1

Rating Scorecard - Key financial ratios

14.7%

17.5%

-0.8%

31.7%33.9%

-10%

0%

10%

20%

30%

40%

-5%

0%

5%

10%

15%

20%

Asset Risk:Problem Loans/

Gross Loans

Capital:Tangible Common

Equity/Risk-WeightedAssets

Profitability:Net Income/

Tangible Assets

Funding Structure:Market Funds/

Tangible BankingAssets

Liquid Resources:Liquid Banking

Assets/TangibleBanking Assets

Solvency Factors (LHS) Liquidity Factors (RHS)

Hamburg Commercial Bank AG (BCA: ba2) Median ba2-rated banks

So

lve

ncy F

acto

rs

Liq

uid

ity F

acto

rs

Source: Moody's Investors Service

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

Credit strengths

» HCOB benefits from strong capitalisation, required as part of its three-year managed transition between sectors.

» HCOB maintains substantial liquidity buffers.

» The bank's asset portfolio has been substantially de-risked and simplified.

Credit challenges

» HCOB's current funding profile requires a material transformation and maturity extension.

» Asset-risk concentrations remain high as the bank places a strong focus on commercial real estate (CRE) lending and remainsexposed to shipping loans, although the portfolio is reducing.

» The significant transformation of the bank limits the predictability of its ability to achieve future profit targets.

OutlookHCOB's ratings carry a stable outlook, which reflects our expectation that the bank will only gradually build a track record of successfulexecution of its transformation plan.

Factors that could lead to an upgrade

» An upgrade of HCOB's Baa2 debt and deposit ratings will be subject to an upgrade of the bank's ba2 BCA. HCOB's senior unsecuredand deposit debt classes already benefit from the maximum achievable uplift of three notches under our Advanced LGF analysis.

» An upgrade of HCOB's BCA would be subject to (1) the establishment of a track record of sustainable profit generation withoutincurring significant new asset risks, (2) an economically successful optimisation of its capital structure and an improvement in itscapitalisation, (3) the bank's ability to maintain an ample buffer of liquid resources, or (4) a successful diversification of the bank'sfunding profile if this results in a lower dependence on market funding, or a combination of these.

Factors that could lead to a downgrade

» HCOB's Baa2 debt and deposit ratings could be downgraded if the bank's BCA is downgraded or if the transformation of its liabilitystructure leads to a less favourable outcome under our Advanced LGF analysis.

» A downgrade of HCOB's BCA could result from a pronounced negative deviation of HCOB's future financial performance from thesolvency and liquidity metrics that we currently expect. In particular, (1) underperformance within HCOB's cyclical exposures toCRE as well as in its remaining portfolio of performing shipping loans, or (2) a failure of HCOB to execute its transition plan for itsfunding profile may result in a BCA downgrade.

» Based on our Advanced LGF analysis, in particular, the bank's junior senior debt ratings could be downgraded if the volume of lower-ranking liabilities is not replenished within the context of the bank's planned liability and capital structure transformation.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 9 July 2019 Hamburg Commercial Bank AG: Update to credit analysis

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Key indicators

Exhibit 2

Hamburg Commercial Bank AG (Consolidated Financials) [1]12-182 12-172 12-162 12-152 12-142 CAGR/Avg.3

Total Assets (EUR Billion) 53.6 68.3 81.1 93.4 104.8 (15.5)4

Total Assets (USD Billion) 61.2 82.0 85.5 101.4 126.8 (16.7)4

Tangible Common Equity (EUR Billion) 3.9 3.9 4.5 4.5 3.7 0.84

Tangible Common Equity (USD Billion) 4.4 4.7 4.7 4.8 4.5 (0.6)4

Problem Loans / Gross Loans (%) 2.9 18.8 22.5 26.4 22.8 18.75

Tangible Common Equity / Risk Weighted Assets (%) 17.5 17.6 15.7 11.9 9.5 14.46

Problem Loans / (Tangible Common Equity + Loan Loss Reserve) (%) 20.3 229.1 352.3 295.7 264.7 232.45

Net Interest Margin (%) 0.9 1.1 0.7 1.0 0.5 0.85

PPI / Average RWA (%) -0.1 3.8 0.2 0.5 -0.5 0.86

Net Income / Tangible Assets (%) -0.8 -0.8 0.1 0.2 0.3 -0.25

Cost / Income Ratio (%) 105.2 41.1 93.3 85.2 118.7 88.75

Market Funds / Tangible Banking Assets (%) 31.7 33.3 36.1 39.8 45.7 37.35

Liquid Banking Assets / Tangible Banking Assets (%) 33.9 33.9 25.4 25.3 25.1 28.75

Gross Loans / Due to Customers (%) 116.8 108.6 130.2 138.3 156.0 130.05

[1]All figures and ratios are adjusted using Moody's standard adjustments. [2]Basel III - fully-loaded or transitional phase-in; IFRS. [3]May include rounding differences due to scaleof reported amounts. [4]Compound Annual Growth Rate (%) based on time period presented for the latest accounting regime. [5]Simple average of periods presented for the latestaccounting regime. [6]Simple average of Basel III periods presented.Source: Moody's Investors Service; Company Filings

ProfileBased in northern Germany, Hamburg Commercial Bank AG (HCOB) is a regional commercial bank with a focus on asset-based lendingfor CRE and renewable energy projects. The bank re-branded to HCOB from HSH Nordbank AG in early 2019 and aims to operate asan efficient commercial bank focused on domestic clients, yet with an appetite for international expansion into select neighbouringcountries.

HCOB is the first former Landesbank to transform into a privately owned bank. Since 28 November 2018, the bank has been owned bya consortium of private equity funds led by Cerberus Capital Management L.P. (Cerberus) and J.C. Flowers & Co (J.C. Flowers).

The bank's ties with its prior public-sector owners, the federal state of Schleswig-Holstein and the city state of Hamburg, have beenlargely severed, through the early settlement of the €10 billion asset guarantee provided by them. HCOB's historical owners remainresponsible as guarantors of payment obligations under liabilities incurred by HCOB's predecessor banks until 18 July 2001 andassumed by HCOB subsequently.

HCOB will remain a member of S-Finanzgruppe's institutional protection scheme (IPS) during the three-year transition perioduntil HCOB will become a full member of the voluntary deposit guarantee fund for Germany's private banks, subject to a positiveassessment of its financial strength at that point by the Bundesverband deutscher Banken (BdB). This fund protects the claims of retailand small and medium-sized enterprise investors that exceed the coverage of the statutory deposit guarantee scheme and, to a lesserextent, also covers deposits of select institutional investors.

HCOB's owners have committed to additional capital strengthening measures for HCOB in case the BdB would otherwise rejectHCOB's full-membership application in three years on the base of BdB's membership criteria for financial metrics not being met.

For more information, please refer to the bank's Issuer Profile and to our German Banking System Profile.

3 9 July 2019 Hamburg Commercial Bank AG: Update to credit analysis

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Weighted Macro Profile of Strong+Although HCOB is focused on the German market, the bank's assigned Strong+ Weighted Macro Profile is set one notch belowthe Very Strong(-) Macro Profile of Germany, reflecting the issuer's international activities in countries with a less benign operatingenvironment, including its shipping exposures, which are sensitive to global trade and macroeconomic conditions.

Detailed credit considerationsSuccessful privatisation supports a sustained improvement in capital adequacyWe expect HCOB to maintain substantial core capital buffers over the medium term, as reflected in the assigned a1 Capital score, onenotch below the initial Capital score. We believe the bank will be highly committed to its target of maintaining a 16%+ CET1 ratio(which we expect to be a close proxy for the tangible common equity ratio we use to measure capitalisation) to reassure investors andstakeholders during its multiyear sector transition process.

As of 31 December 2018, HCOB maintained a strong Tangible Common Equity ratio of 17.5% (year-end 2017: 17.6%). The offsettingeffects of a strong portfolio reduction, a revaluation of its hybrid capital instruments and the early settlement of the bank's €10 billionasset guarantee from its prior owners overall resulted in stable risk-weighted assets between year-end 2017 and 2018. We expect thebank to maintain broadly stable risk-weighted assets as a result of risk-return focused business growth and RWA optimisation untilaround the time of entry into the BdB. However, tighter regulatory requirements could drive risk weights higher even before Basel IVtakes effect. In terms of regulatory capital ratios, HCOB reports a Common Equity Tier 1 ratio of 18.4% as of year-end 2018 (December2017: 18.7%), supported by a more favorable regulatory treatment of deferred tax assets in comparison to our TCE ratio calculation.

Exhibit 3

Hamburg Commercial Bank is well capitalised…Exhibit 4

… and exceeds its capital requirements

15.7%

17.6% 17.5%

14.1%

18.7% 18.4%

5.5% 5.7%

7.2%

0%

5%

10%

15%

20%

2016 2017 2018

TCE ratio CET1 ratio TCE leverage ratio

Source: Moody's Financial Metrics

10.6%

12.1%

14.1%

0%

5%

10%

15%

20%

CET1 Tier1 Total Capital

2019 minimum capital requirements

Source: Moody's Financial Metrics

The bank's capital levels are supported by the commitment of its owners to bolster these, in case the bank's financial profileunderperforms against the new business plan. The 2.4%-points improvement in HCOB's December 2018 CET1 ratio from 16.0% asof September 2018 was in part driven by a significant markdown of the bank's called hybrid debt instruments under IFRS. The bank'sannounced expected repayment amount for these instruments of below 10% of par is legally contested by investors and could inan adverse scenario lead to a significant reduction of HCOB's CET1 capital, so that the additional capital buffer created in Q4 2018provides in the first place a buffer until greater clarity around the prospects of this litigation or of an amicable settlement between theparties exists.

Far-reaching transformation of HCOB's funding profile is a challengeWe assign a b1 Funding Structure score to HCOB based on our forward-looking expectation that the bank will need to transform itsfunding structure and extend its maturity profile.

Following HCOB's exit from S-Finanzgruppe, the bank's solvency profile and liquidity buffers will gain additional relevance for thewholesale funding markets, which had already factored in the expected eventual loss of IPS support over the past few years. This hasled to a shortening of maturities for HCOB's new issuances, and we expect the bank to restore a better diversified maturity profileduring the three-year transition period.

4 9 July 2019 Hamburg Commercial Bank AG: Update to credit analysis

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On its way to tapping longer-term funding, HCOB successfully debuted a three-year benchmark senior unsecured bond issuance inMay 2019. HCOB aims to reduce its dependence on institutional deposits over time and instead plans to further grow its online retaildeposit franchise launched late in 2017, which contributed €3.2 billion to HCOB's total funding as of 31 December 2018. We believeHCOB's withdrawal from the Deposit Solutions online deposit platform in Q2 2019 indicates the bank re-evaluates its target depositmix in light of the extended low interest rate expectations which make deposit funding a relatively costly tool.

Exhibit 5

Hamburg Commercial Bank has reduced its reliance on confidence-sensitive wholesale funding sourcesComposition of funding sources

4% 5% 6% 6% 8%

30%23% 24% 21%

20%

39%46%

48%51%

51%

13% 15% 11% 12% 10%

0%

10%

20%

30%

40%

50%

0%

20%

40%

60%

80%

100%

2014 2015 2016 2017 2018

Equity Other liabilities Issued securities Derivative liabilities Deposits Interbank Market Funds Ratio (RHS)

Note: Market Funds Ratio = Market Funds % Tangible Banking AssetsSource: Moody's Financial Metrics

Substantial liquidity buffers and IPS transition arrangement grant time to execute funding transformationWe assign a baa2 Liquidity score to HCOB based on our forward-looking expectation that the bank will gradually shrink the initialunencumbered liquidity levels reflected in its full-year 2018 balance sheet.

HCOB has reported a marked temporary increase in its cash position in its full-year 2018 balance sheet, up to €5.4 billion at year-end 2018 from €2.6 billion as of 30 September 2018, driven by the early settlement of the asset guarantee claims against the bank'sprior owners, which were valued at €4.5 billion as per HCOB's 30 September 2018 quarterly report. HCOB will have some flexibilityregarding the conversion of these funds into less liquid but potentially more profitable new lending or into liquid securities andintrabank assets in accordance with its ability to cover its refinancing needs.

Exhibit 6

Hamburg Commercial Bank maintains sufficient balance-sheet liquidityComposition of assets

59%57% 62%

57% 58%

18% 19% 19%

20% 19%

6%6% 5%

5% 6%

5%3% 4%

9% 10%

0%

10%

20%

30%

40%

50%

0%

20%

40%

60%

80%

100%

2014 2015 2016 2017 2018

Other assets Loans Derivative assets Securities & investments Interbank Cash Liquid Resources Ratio (RHS)

Note: Liquid Resources Ratio = Liquid Banking Assets % Tangible Banking AssetsSource: Moody's Financial Metrics

5 9 July 2019 Hamburg Commercial Bank AG: Update to credit analysis

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As an additional temporary backstop for HCOB's refinancing transformation, we expect the money markets and shorter-term capitalmarket funding to be available for HCOB in light of its continuity within the IPS of S-Finanzgruppe until the definite transition to theprivate banks sector as of year-end 2021. By year-end 2021, HCOB's expected entry into the private-sector deposit protection scheme,a discretionary scheme offering compensation for depositor losses for amounts above €100,000, will be key to maintaining access tomarket funds beyond retail deposits.

Asset-risk concentrations remain high after the substantial de-risking through an asset carve-outWe assign a ba2 Asset Risk score to HCOB, which reflects a level of problem loans between 3% and 4% of gross loans, following thecarve-out of large parts of its nonperforming exposures, and also remaining concentration risks as well as expected lawsuits against thebank's hybrid capital investors.

Following the final one in a series of transfers of legacy assets over the past years, through which the bank's problem loan ratio declinedto 2.9% as of year-end 2018 (December 2017: 18.8%), HCOB focuses on the business areas it has been concentrating its underwritingon recently, primarily domestic CRE and corporate lending, including, to a large extent, renewable energy financing. At the same time,the bank's CRE concentration and its remaining shipping assets leave it exposed to cyclical exposures that, in the case of its CRE andcorporate loan book, have a relatively short track record of performance in a benign economic environment.

Exhibit 7

Credit Risk has decreased after the NPL carve-outVolume in € billion

0%

5%

10%

15%

20%

25%

30%

35%

0.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

2014 2015 2016 2017 2018

Problem loans Loan loss reserves* Problem loans / Gross loans (RHS)

Note: *Loan loss reserves excluding the compensation item under the former guaranteeSource: Moody's Financial Metrics

In 2017, the bank underwrote €8.6 billion of new exposures, after €8.9 billion in 2016, compared with medium-term projected totalassets of around €55 billion. New business activity slowed in 2018, with €8.0 billion of new client receivables booked (in addition,HCOB syndicated more than €400 million of exposures to other partners in 2018, up from less than €100 million in 2017), but HCOBbenefitted from higher new lending margins.

Following HCOB's announcements in which the bank warned about very low principal repayment expectations for its outstandinghybrid instruments, investors challenge HCOB's approach to these instruments in court. Such litigation raises the uncertainty aroundHCOB's future capitalisation levels, which are highly sensitive to the repayment or repurchase amounts paid to the investors.

After the removal of complexity, HCOB can focus on establishing a track record of improving profitabilityWe assign a b3 Profitability score to HCOB, which reflects our expectation that the bank will be able to defend moderate levels ofprofitability despite far-reaching restructuring measures.

Following the announced final clean-up of its balance sheet, HCOB can be structurally profitable to the extent that its recurringrevenue covers its total costs. The clean-up will enable the bank to achieve a major cost relief, considering savings in the areas of riskcharges, guarantee fees and the considerable staff costs required for the workout of the nonperforming book.

Efficiency improvements will be paramount for the bank to effectively compete for new lending opportunities while operating with(initially) higher funding costs. We further believe that the bank's new ownership structure will give HCOB access to additional process

6 9 July 2019 Hamburg Commercial Bank AG: Update to credit analysis

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

optimisation skills that will help it reposition its cost base. Even so, the bank's target of a cost-to-income ratio not higher than 40%sets an ambitious benchmark that would position HCOB at the more efficient end of the German banking industry and reflect thebank's planned focus on corporate banking and commercial real estate lending.

For 2018, HCOB reported a net profit of €77 million, yet on an adjusted basis, the bank's net loss was €402 million (2017: net loss of€533 million). Its reported 2018 full-year result benefitted from a €1.0 billion extraordinary results contribution from the writedownof hybrid capital instruments. In turn, the result was burdened by a €100 million expense for the early settlement of the bank's assetguarantee, €366 million of restructuring reserves and costs, €107 million of other provisions, foremost related to litigation costs,as well as by €316 million of loan loss provisions that reflected a more cautious approach to shipping exposures and to the generalmacroeconomic environment.

Exhibit 8

Following the final clean-up of its balance sheet HCOB is expected to become structurally profitablein € million; balance sheet size at year-end on x-axis

561986

578856

561

355

284

319

723

-1,232 -1,155-899

-669 -549

586

191

165

-1,350

-553

-2,500

-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2014 2015 2016 2017 2018

€110 billion €97 billion €84 billion €70 billion €55 billion

Net interest income Net fee and commission income Trading & other income Operating expenses

Risk provisions Extraordinary income and expenses Pre-tax profit

Note: includes Moody's adjustments for material nonrecurring and unusual itemsSource: Moody's Financial Metrics

Business diversification adjustmentTo reflect the risks stemming from HCOB's focused asset-based lending business model, we also apply a one-notch qualitativeadjustment for its limited Business Diversification in our Scorecard, which leads to a ba2 BCA from the bank's ba1 Financial Profile.

Following the privatisation, HCOB plans to maintain its business focus on asset-based lending, with a strong emphasis on domesticcommercial real estate lending and renewable energy projects. A greater degree of specialisation may limit a bank's ability to mitigateunexpected earnings volatility from its core activities.

Business diversification is an important gauge of a bank's sensitivity to stress in a single business line. It is related to earnings stabilityin the sense that earnings diversification across distinct and relatively uncorrelated lines of business increases the reliability of a bank'searnings streams and its potential to absorb shocks affecting a business line.

In particular through its emphasis on CRE lending, HCOB will be exposed to a rather volatile banking business through the cycle: Weconsider CRE lending a highly cyclical and, therefore, higher-risk sector exposure. CRE exposures can cause high losses in times offinancial market stress.

Support and structural considerationsAffiliate supportWe assume a low probability of affiliate support, which results in no uplift for the ba2 Adjusted BCA from the bank's BCA. Thisassumption reflects that HCOB will leave the cross-sector support scheme from S-Finanzgruppe as of the end of November 2021. Onlyuntil then would the group's IPS be committed to stabilising the bank to avert a failure to fulfil its contractual payment obligations.

We believe HCOB's capitalisation and refinancing position will temporarily benefit from the close alignment of S-Finanzgruppe,BdB and the new owners to ensure a seamless sector transition as of year-end 2021, and we consider these benefits directly in therespective scores within the BCA Scorecard.

7 9 July 2019 Hamburg Commercial Bank AG: Update to credit analysis

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Loss Given Failure analysisHCOB is subject to the European Union (EU) Bank Recovery and Resolution Directive (BRRD), which we consider an operationalresolution regime. We, therefore, apply our Advanced LGF analysis, where we consider the risks faced by the different debt and depositclasses across the liability structure, should the bank enter resolution.

Our Advanced LGF analysis follows the insolvency legislation in Germany that became effective on 21 July 2018. Following the changein law, the legal hierarchy of bank claims in Germany is now consistent with most other EU countries, where statutes do not providefull preference to deposits over senior unsecured debt; the amended application of our Advanced LGF analysis reflects the revisedhierarchy of claims. Our LGF analysis therefore now takes into consideration the results of both the formal legal position (pari passu or“de jure” scenario), with a 75% probability, and an alternative liability ranking reflecting resolution authority discretion (full depositorpreference or “de facto” scenario), to which we assign a 25% probability.

In line with our standard assumptions, we further assume residual tangible common equity of 3% and losses post failure of 8% oftangible banking assets, a 25% run-off in junior wholesale deposits and a 5% run-off in preferred deposits.

» For deposits and senior unsecured debt, rated Baa2, our LGF analysis indicates an extremely low loss given failure, leading to athree-notch uplift above the ba2 Adjusted BCA.

» For junior senior unsecured debt, rated Baa3, our LGF analysis indicates a very low loss given failure, leading to a two-notch upliftabove the ba2 Adjusted BCA.

» For HCOB's subordinated programme, rated (P)Ba3, our LGF analysis indicates a high loss given failure, leading us to position itsrating one notch below the ba2 Adjusted BCA.

» Trust-preferred securities and silent participations (Stille Einlagen) are rated C(hyb). These ratings relate to the entities HSH NFunding I, HSH N Funding II, RESPARCS Funding Limited Partnership I and RESPARCS Funding II Limited Partnership, and are basedon our expected loss calculation. The C(hyb) ratings reflect (1) principal write-downs to currently 39.7% of the nominal amounts,and (2) HCOB's announcements on 6 November and 30 November that it calls the instruments at the future local GAAP bookvalue as of year-end 2020 and that it considers a liability management exercise ahead of the call repayment.

Government support considerationsFollowing the introduction of the BRRD, we have lowered our expectations about the degree of support the government might provideto a bank in Germany in the event of need. Because of its size on a consolidated basis, we consider S-Finanzgruppe as systemicallyrelevant and, therefore, attribute a moderate probability of German government support for all members of the sector, in line with oursupport assumptions for other systemically relevant banking groups in Europe.

In light of the exit of HCOB from S-Finanzgruppe, we assign a low probability of government support to HCOB, resulting in no ratinguplift.

Counterparty Risk Ratings (CRRs)CRRs are opinions of the ability of entities to honour the uncollateralised portion of non-debt counterparty financial liabilities (CRRliabilities) and also reflect the expected financial losses in the event such liabilities are not honoured. CRRs are distinct from ratingsassigned to senior unsecured debt instruments and from issuer ratings because they reflect that, in a resolution, CRR liabilities mightbenefit from preferential treatment compared with senior unsecured debt. Examples of CRR liabilities include the uncollateralisedportion of payables arising from derivatives transactions and the uncollateralised portion of liabilities under sale and repurchaseagreements.

HCOB's CRRs are positioned at Baa2/P-2

The CRRs are positioned three notches above the bank's ba2 Adjusted BCA, based on the extremely low loss given failure from the highvolume of instruments that are subordinated to CRR liabilities, reflected in three notches of uplift.

8 9 July 2019 Hamburg Commercial Bank AG: Update to credit analysis

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Counterparty Risk (CR) AssessmentThe CR Assessment is an opinion of how counterparty obligations are likely to be treated if a bank fails and is distinct from debt anddeposit ratings in that it (1) considers only the risk of default rather than both the likelihood of default and the expected financial losssuffered in the event of default, and (2) applies to counterparty obligations and contractual commitments rather than debt or depositinstruments. The CR Assessment is an opinion of the counterparty risk related to a bank's covered bonds, contractual performanceobligations (servicing), derivatives (for example, swaps), letters of credit, guarantees and liquidity facilities.

HCOB's CR Assessment is positioned at Baa2(cr)/P-2(cr)The bank's CR Assessment is positioned three notches above its ba2 Adjusted BCA, based on the buffer against default provided bymore subordinated instruments to the senior obligations represented by the CR Assessment. To determine the CR Assessment, wefocus purely on subordination, taking no account of the volume of the instrument class.

Methodology and scorecardThe principal methodology we used in rating HCOB was Banks, published in August 2018.

About Moody's Bank ScorecardOur Bank Scorecard is designed to capture, express and explain in summary form our Rating Committee's judgement. When readin conjunction with our research, a fulsome presentation of our judgement is expressed. As a result, the output of our scorecardmay materially differ from that suggested by raw data alone (though it has been calibrated to avoid the frequent need for strongdivergence). The scorecard output and the individual scores are discussed in rating committees and may be adjusted up or down toreflect conditions specific to each rated entity.

9 9 July 2019 Hamburg Commercial Bank AG: Update to credit analysis

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Rating methodology and scorecard factors

Exhibit 9

Hamburg Commercial Bank AGMacro FactorsWeighted Macro Profile Strong + 100%

Factor HistoricRatio

MacroAdjusted

Score

CreditTrend

Assigned Score Key driver #1 Key driver #2

SolvencyAsset RiskProblem Loans / Gross Loans 14.7% b1 ↑↑ ba2 Sector concentration Litigation risk

CapitalTangible Common Equity / Risk Weighted Assets(Basel III - transitional phase-in)

17.5% aa2 ←→ a1 Access to capital Stress capital resilience

ProfitabilityNet Income / Tangible Assets -0.8% caa1 ↑ b3 Expected trend Return on assets

Combined Solvency Score baa3 baa3LiquidityFunding StructureMarket Funds / Tangible Banking Assets 31.7% ba1 ←→ b1 Market

funding qualityDeposit quality

Liquid ResourcesLiquid Banking Assets / Tangible Banking Assets 33.9% a2 ←→ baa2 Stock of liquid assets Expected trend

Combined Liquidity Score baa2 ba2Financial Profile ba1Qualitative Adjustments Adjustment

Business Diversification -1Opacity and Complexity 0Corporate Behavior 0

Total Qualitative Adjustments -1Sovereign or Affiliate constraint AaaScorecard Calculated BCA range ba1 - ba3Assigned BCA ba2Affiliate Support notching 0Adjusted BCA ba2

Balance Sheet In-scope(EUR Million)

% In-scope At failure(EUR Million)

% At failure

- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -

Total Tangible Banking Assets - - - -

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MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

De jure waterfall De facto waterfall NotchingDebt ClassInstrumentvolume +

subordination

Sub-ordination

Instrumentvolume +

subordination

Sub-ordination

De jure De factoLGF

NotchingGuidance

vs.Adjusted

BCA

AssignedLGF

notching

Additionalnotching

PreliminaryRating

Assessment

Counterparty Risk Rating - - - - - - - 3 0 baa2Counterparty Risk Assessment - - - - - - - 3 0 baa2(cr)Deposits - - - - - - - 3 0 baa2Senior unsecured bank debt - - - - - - - 3 0 baa2Junior senior unsecured bank debt - - - - - - - 2 0 baa3Dated subordinated bank debt - - - - - - - -1 0 ba3

Instrument Class Loss GivenFailure notching

Additionalnotching

Preliminary RatingAssessment

GovernmentSupport notching

Local Currency rating ForeignCurrency

ratingCounterparty Risk Rating 3 0 baa2 0 Baa2 Baa2Counterparty Risk Assessment 3 0 baa2(cr) 0 Baa2(cr)Deposits 3 0 baa2 0 Baa2 Baa2Senior unsecured bank debt 3 0 baa2 0 Baa2 Baa2Junior senior unsecured bank debt 2 0 baa3 0 Baa3 Baa3Dated subordinated bank debt -1 0 ba3 0 (P)Ba3[1]Where dashes are shown for a particular factor (or sub-factor), the score is based on non-public information.Source: Moody’s Investors Service

Ratings

Exhibit 10Category Moody's RatingHAMBURG COMMERCIAL BANK AG

Outlook StableCounterparty Risk Rating Baa2/P-2Bank Deposits Baa2/P-2Baseline Credit Assessment ba2Adjusted Baseline Credit Assessment ba2Counterparty Risk Assessment Baa2(cr)/P-2(cr)Issuer Rating Baa2Senior Unsecured Baa2Junior Senior Unsecured Baa3Junior Senior Unsecured MTN -Dom Curr (P)Baa3Subordinate MTN -Dom Curr (P)Ba3ST Issuer Rating P-2Other Short Term -Dom Curr (P)P-2

HSH N FUNDING I

BACKED Pref. Stock Non-cumulative C (hyb)HSH N FUNDING II

Jr Subordinate C (hyb)Source: Moody's Investors Service

Endnotes1 The ratings shown are S-Finanzgruppe's corporate family rating and outlook and its BCA.

11 9 July 2019 Hamburg Commercial Bank AG: Update to credit analysis

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13 9 July 2019 Hamburg Commercial Bank AG: Update to credit analysis