Germany’s Norddeutsche Landesbank (Nord/LB) decided to withdraw from the ship financing sector as it looks for a fresh start with a capital injection of EUR 3.5 billion (USD 3.9 billion).The German banks are were pretty important to maritime finance and I'm not sure the new crowd is up to the task. Plus they have a whiff of the parvenu about them.
Owing to the run down of bad loans from ship financing, Nord/LB set aside additional risk provisions of EUR 1.893 billion in 2018. Although all the bank’s other business segments remained profitable in 2018, expanding risk provisions for the ship financing portfolio led to a net loss for the year, as previously reported.
Earnings before taxes for 2018 amounted to minus EUR 2.057 billion, while consolidated profit came in at minus EUR 2.354 billion. In financial year 2017 by contrast, the bank posted a pre-tax gain of EUR 195 million.
“Such a heavy loss for 2018 is painful,” Thomas Bürkle, CEO of Nord/LB, said.
“But ridding ourselves of bad loans from ship financing will give us a new start. We now have clarity regarding the bank’s future path. We will combine the strengths Nord/LB is known for as a financier of SMEs with particular expertise in structured financing.”
Nord/LB will reinforce its capital ratio via a cash capital injection of EUR 2,835 million, in which two German federal states will participate, Lower Saxony with roughly EUR 1.5 billion and Saxony-Anhalt with roughly EUR 200 million. The Savings Banks Financial Group will provide EUR 1.135 million. Lower Saxony will also be contributing EUR 800 million in capital-relief measures, bringing the total capital to around EUR 3.5 billion....MORE
See also:
Finance: "Hedge Funds Hunt for Shipping Debt in New Market Push"
Signposts: "Wave of private equity money flows into shipping"
"Chinese Leasing Firms a New Force in Global Shipping"
The "whiff of the parvenu..." line is either from Churchill's detective/bodyguard on a certain wealthy American or Kingsley Amis on F. Scott Fitzgerald
