Germany bank Nord/LB has confirmed that it will withdraw from the ship financing sector.
Nord/LB has been shedding its non-performing loan (NPL) shipping portfolio since 2015. In that time it has reduced its entire shipping portfolio from EUR19 billion (USD21.57 billion) to EUR7.5 billion (USD8.4 billion) by the end of 2018.
The bank said that its non-performing loan portfolio is being run down as “a matter of urgency”. The next step is to transfer a significant part of the portfolio, approximately EUR2.6 billion (USD2.91 billion), to a financial investor.
The German lender also hopes to secure a USD3.9 billion refinancing package with German Savings Banks Association (DSGV). The deal, which it aims to complete in the third quarter of 2019, will be used for restructuring. Moving ahead, the bank will focus on energy, infrastructure, property and aircraft markets.
Thomas Bürkle, ceo of Nord/LB, said: “Ridding ourselves of bad loans from ship financing will give us a new start. We will combine the strengths Nord/LB is known for as a financier of small and medium-sized enterprises (SMEs) with particular expertise in structured financing.”
He added: “The new Nord/LB will not only have less risk and become more regionally focussed, it will also be much smaller. The target size for the medium term is set at total assets of some EUR95 billion (USD106.5 billion). We will thus proceed to reduce total assets as we have done over the past ten years. Nord/LB will nevertheless remain a strong and capable bank.”
