Deutsche Bank Says Sales of Shipping Loans May Accelerate on ECB
Time：2014-05-23
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“The ECB stress-test could be another reason why banks are inclined to let more and more papers go and sell at a loss,” Klaus Stoltenberg, global head of shipping at Frankfurt-based Deutsche Bank, said in a speech at a conference in Hamburg today. “Recently we have seen an increase in loan trading.”
The ECB has started scrutinizing whether the 128 biggest euro area banks are setting aside enough money for potential loan losses before it becomes the industry supervisor in November. European shipping lenders led by Germany’s HSH Nordbank AG, Commerzbank AG (CBK) and Norddeutsche Landesbank Girozentrale are facing increased costs from non-performing shipping loans as overcapacity in the industry persists.
Interest in investing in the loans has mainly come from private-equity firms in the U.S., Stoltenberg said in an interview on the sidelines of the conference. “There is no shortage of buyers.”
Private-equity firms pumped more than $7.2 billion into the industry in 2013, according to Marine Money, an industry newsletter. They entered partnerships, ordered new vessels or bought ship debt at the fastest pace since 2008 as a fifth year of near zero interest rates saw more money chasing fewer deals.
Taking Losses
Deutsche Bank is usually not among lenders selling shipping loans, Stoltenberg said.
The company is “very conservative” and has only realized losses on two deals, he said.
Deutsche Bank, which Stoltenberg joined last month from NordLB, had a shipping portfolio of 5.9 billion euros at the end of 2013, including 5.3 billion euros of loans and 600 million euros of commitments, spokesman Frank Hartmann said by telephone last month. Hartmann declined to comment on the proportion of the debt that was non-performing.
HSH Nordbank, the world’s biggest lender to the industry, reported 9 billion euros of bad shipping debt, or about 43 percent of its loans to the industry, in fourth-quarter earnings published in April.
The container industry, which accounts for the biggest share of the loans among German lenders, continues to suffer from overcapacity since the global financial crisis triggered a trade slump and the worst decline in charter prices since the 1970s.