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Wall Street Journal reports that the global shipping crisis is stoking another European banking headache, this time in Germany. In February Commerzbank AG warned that its losses on shipping loans could be as high as EUR600 million this year after nearly doubling last year. And Deutsche Bank AG, Germany’s largest bank, said its expected losses from shipping loans nearly tripled, to EUR346 million, from a year earlier.

German banks and investors own more of the world’s containership capacity than any other country — roughly 29%, according to the German Shipowners’ Association. Plunging world shipping rates and the bankruptcy of South Korea’s Hanjin Shipping last year helped create a bloodbath for the sector, Banks world-wide now are racing to dump bad shipping loans while shippers scramble to unload worthless ships.No bank epitomizes the problem more clearly than HSH Nordbank, whose lending spree left it owning a commercial fleetlarger than the British, French and German military navies combined. European Union authorities have ordered the bank to be privatized by early next year or shut. Taxpayers in northern Germany face losses of up to EUR15 billion, or over EUR3,000 a person.

 
 
 
 
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