Nord/LB Shrinks Shipping Loan Portfolio, Returns to Profit

German shipping bank Norddeutsche Landesbank (Nord/LB) returned to profit in financial year 2017 after significantly reducing its shipping loan portfolio.

Triggering loan loss provisions of EUR 986 million, the shipping crisis left its mark on the bank’s annual report for 2017. However, the impact on earnings was much smaller than in the previous year. At the same time, the bank made good progress again with reducing its shipping loan portfolio. By the end of 2017, the portfolio was reduced to EUR 12.1 billion, after EUR 16.8 billion just twelve months before.

Nord/LB concluded the year with earnings before taxes of EUR 195 million. Consolidated profit totalled EUR 135 million. In the financial year 2016, the bank posted a loss before taxes of EUR 1.9 billion as a result of the marked intensification of the global shipping crisis.

“We achieved the four major objectives that we set ourselves for 2017,” said Thomas Bürkle, Chairman of the Management Board of Nord/LB.

“The bank returned to profit again and managed to push its capital ratios up. We have also made much faster progress than originally planned with reducing our shipping loan portfolio. And we took the first important step in repositioning the group with the complete integration of Bremer Landesbank into NORD/LB.”

According to Bürkle, the bank will be focusing on non-performing loans (NPL) during the ongoing reduction in the shipping loan portfolio.

“We want to bring the NPL portfolio down from EUR 8.2 billion today to less than EUR 5 billion by no later than the end of 2019,” Bürkle concluded.