NordLB to Chop Shipping Loans by Up to USD 8 Bln
- Business & Finance
Led by the current slowdown in the shipping market, German shipping bank Norddeutsche Landesbank (Nord/LB) said it will decrease its shipping loans by some EUR 5 to 7 billion (USD 5.6 to 7.9 billion).
Namely, the bank is planning to reduce the shipping portfolio from its current volume of EUR 19 billion by outsourcing risks and targeted reduction to a future volume of some EUR 12 to 14 billion, according to the Chairman of the Managing Board of Nord/LB, Dr. Gunter Dunkel.
“This will not be possible without additional negative impact on earnings. Nonetheless, Ship Finance is set to remain a key component of our business model in future,” Dunkel said.
Nord/LB further said that 2016 will also be a challenging year with “tighter regulatory stipulations, increasingly intensive competition, the continuation of low interest rates and the increasing digitalisation of the finance sector.”
Added to these factors, as well as the ongoing shipping crises, the bank expects that “risk provisioning will also be negatively impacted to a large extent this year.”
Although it is almost impossible to predict further developments on the shipping markets, Dunkel said that “the only certainty is that things will remain difficult.”