Nord/LB Delivers Profit, Still Fears Shipping Crisis
- Business & Finance
Although the German shipping bank Norddeutsche Landesbank (Nord/LB) made a good start into the year and further reduced its shipping finance portfolio, there is “still no all-clear for the shipping crisis.”
Nord/LB concluded the first quarter of 2017 with earnings before taxes of EUR 255 million, compared to a pre-tax loss of EUR 107 million reported in the same quarter a year earlier. Consolidated profit stood at EUR 214 million, against EUR -93 million seen in the corresponding period in 2016.
“We started well into the new year. With this result, we have made the first step towards our target of generating a profit for the full-year,” Thomas Bürkle, Chairman of the Managing Board of Nord/LB, said.
Bürkle further informed that the company plans to continue with this target and work hard over the coming months to ensure it is achieved.
In the first quarter, group net interest income amounted to EUR 406 million, against EUR 459 million seen in the same quarter of 2016. Net allocations to risk provisioning in credit business declined considerably to EUR 126 million from EUR 435 million.
The lion’s share of loan loss provisions cover risks from the shipping finance division. The shipping finance portfolio continued to be scaled back over the first three months and now totals EUR 15.9 billion, according to Nord/LB.
“Even if business is going well and loan loss provisions have declined, the shipping crisis continues to present major challenges. We are still unable to sound the all-clear,” Bürkle added.
Additionally, Nord/LB said that it is on the right track for the complete integration of Bremer Landesbank (BLB), as it aims to secure the legal merger of BLB and NORD/LB on August 31, 2017.
Work on its One Bank transformation programme is also moving forward as planned. In order to place the group on a sustainably profitable footing overall, Nord/LB wants to tap into cost potential of between EUR 150 million and EUR 200 million by the end of 2020.
To this end, the group intends to shed up to 1,250 jobs compared with today’s figure. In the course of the transformation programme all group units including subsidiaries and associate companies will be scrutinized, including the option of the divestiture of the latter, Nord/LB said.