Germany’s second-largest marine lender, Nord LB, said its shipping loan portfolio turned a corner in the first quarter after several years of hefty losses.
Its result only from ship lending reached EUR23 million (USD25.5 million) in the first three months. A direct comparison with the corresponding period last year is not possible, because until recently Nord LB only reported consolidated segment results for shipping and aviation. Losses from shipping and aviation totalled EUR242 million in 2014.
In the first quarter, net interest income from shipping clients was EUR111 million, while risk provisioning for the segment amounted to EUR69 million, Nord LB said in its interim report.
The bank highlighted positive effects on its risk exposure from the recovery in charter hire rates for container ships and from strong crude tanker earnings. However, it warned that loan loss provisions would remain at a high level for the foreseeable future.
As with all other German shipping banks, Nord LB has seen its euro-denominated shipping loan book inflated by the appreciation of the dollar against the euro. Its total exposure to shipping consequently increased to EUR19.2 billion, from EUR17.7 billion at the end of 2014.