NordLB continues to face shipping debt challenges

German Landesbank NordLB, one of the biggest maritime lenders in Europe, continues to face challenges due to the share of shipping debt within its portfolios, H1 figures suggest.

The bank, which recently pledged to reduce the volumes of shipping debt, reported that overall debt levels had decreased from €19bn to €17.9bn in the first half of 2016, it eventually aims to reduce debt exposure to €12 to €14bn.

While the bank booked positive results in almost all other business segments, an increase in provisions by €435m in Q12016 alone dragged down overall profits. As a result, the bank reported a net loss of €406m in the first half of 2016.

“The shipping debt crisis, which reinforced in the first half of 2016, has made higher than anticipated write-downs necessary, explains chairman of the NordLB board Gunter Dunkel.

“Thanks to an overall solid development of out business apart from maritime financing as well as a consistent strengthening of our capital position in previous years, we have been able to deal with these losses entirely on our own. By further reducing our shipping debt exposure, we aim to increase the quality of our portfolio and strengthen the bank for the future” he adds.

As a result of its high shipping debt levels, the bank’s CET1 ratio declined gradually from 13.1 to 12 percent, the total capital ratio fell from 16.7 to 16.1 percent and the leverage ratio from 4.3 to 4.1 percent.

Mona Dohle
Mona Dohle speaks German and Dutch, she is DACH & Benelux Correspondent for InvestmentEurope. Prior to that, she worked as a journalist in Egypt and Palestine. She started her career as a journalist working for a local German newspaper. Mona graduated with an MSc in Development Studies from SOAS and has completed the CISI Certificate in International Wealth and Investment Management.

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