Germany’s KfW to Make New Loans to Shipping Industry

Press Release
Wednesday, April 18, 2012

KfW Group, Germany’s state-owned development lender, may make 1.5 billion Euros ($2 billion) of new shipping loans this year, even as rivals scale back operations in the crisis-hit industry.

While that is less than new lending of 2 billion Euros in 2011, KfW IPEX-Bank plans to keep the size of its 13.5 billion- euro shipping portfolio “stable,” Christian K. Murach, head of transportation finance and a member of the lender’s management board, said in an interview in Frankfurt.

“There is plenty of room for new business because we didn’t grow as aggressively as many others in the past few years,” Murach, 57, said in his 13th floor office, decorated with models of Hapag-Lloyd AG ships and Airbus SAS planes.“Some other banks don’t have the manpower or capital for new lending, so there is less competition in the market, and the pricing you can demand is fairly attractive.”

Commerzbank AG (CBK), Germany’s second-largest lender, and Hamburg-based HSH Nordbank AG are scaling back their shipping portfolios amid new capital rules and to obtain approval for bailouts they received during the global financial crisis. That comes as slumping freight rates and soaring fuel prices push smaller shipping lines into insolvency and led to losses for major container operators last year.

“The picture for the shipping industry is not great at all and there won’t be much relief in 2012,” Murach said. Growth in new container shipping tonnage is likely to outstrip demand “until at least 2013 and probably even beyond,” he said.

KfW is the world’s seventh-largest shipping lender with a market share of some 4 percent among the world’s top 40 shipping banks, according to Athens-based vessel-finance consultant Petrofin SA. The ranking is topped by HSH Nordbank, followed by Norway’s DNB ASA (DNB), Commerzbank and Sweden’s Nordea AB (NDA).

Transportation financing is “an important part” of IPEX’s business and will remain a major part of its 60 billion-euro lending portfolio despite the shipping crisis, Murach said.

Banks which continue to lend to the industry are likely to benefit from rivals pulling back, according to Fitch Ratings.

“Well-capitalized banks which are in a position to continue providing ship lending will benefit from much lower competitive pressure within the market,” Fitch said in a report on March 29.

Ship finance lending margins “have typically doubled since 2008 and are the highest they have been for several decades, although this is offset by the heightened risk involved.”

Most of IPEX’s new loans this year are likely to be to the offshore shipping industry, including for vessels needed for wind farms and oil drilling rigs, and for ferries and roll-on roll-off ships, Murach said. IPEX also expects “a major role” for companies that supply goods to shipyards, he said.

IPEX is helping to finance two new cruise ships, the largest ever built in Germany, for Norwegian Cruise Line Holding Ltd.

A lot of banks have stopped new lending to the shipping industry, making it “a problem” for IPEX to find partners for bigger projects, such as cruise ships, which often cost more than 500 million euros, Murach said.

Shipping loan losses and provisions among banks will probably increase this year, said Murach, who has worked for KfW for 28 years.

“We don’t foresee any positive development for the industry in general in 2012,” he said.

Last year, three ships that IPEX helped finance were auctioned after the owners filed for insolvency, Murach said. While he doesn’t foresee “any major pipeline” of seizures this year, if needed, IPEX may take ownership of some ships in 2012, Murach said. (Bloomberg)
 

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter January 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

ALMACO Wins Statoil Order for 450 Cabins

ALMACO Group was awarded the contract to build 450 NORSOK-compliant Modular Cabins for Statoil’s Johan Sverdrup fixed platform at Apply Leirvik’s yard in Stord, Norway.

Three Dead on Pemex Platform, Fire Under Control

Three workers were killed and at least seven injured when a fire broke out on a Pemex oil processing platform in the Gulf of Mexico, but the latest in a string of incidents is now under control,

Topaz Responder Saves Refugee Migrants

Topaz Energy and Marine has emerged as an unlikely player in the effort to save refugee migrants risking their lives on the sea crossing from Turkey to Greece’s islands in order to reach Europe.

Cruise Ship Trends

Fincantieri Launches Majestic Princess for China

Italian shipbuilder Fincantieri has launched its first cruise ship destined for the Chinese market, and will now begin interior fittings ahead of the vessel’s delivery scheduled for spring 2017.

Anthem of the Seas to Port after Rough Night

Multiple media outlets including CBS News report that Royal Caribbean's new cruise ship Anthem of the Seas was hit by a strong strom, reportedly resulting in no

World's Richest Travellers Prefer Panama

According to AFP Relaxnews, Panama saw the most growth in interest among the world’s richest jetsetters for travel this winter and spring.   Panama saw the most

Finance

Baltic Index Touches New Record Low

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying industrial commodities, registered a new all-time low on Monday on muted vessel demand.

Oversupplied Market Eyes Floating Storage Opportunities

Brent oil price reached lows of $27/bbl in mid-January, but has recovered over the past two weeks to above the $30/bbl mark. Nevertheless, volatility is expected

Norway will be Lithuania's 2016 Top Gas Supplier

Lithuania will import more gas from Norway than from former sole supplier Russia in 2016 after developing infrastructure to support liquefied natural gas (LNG) imports,

Container Ships

Hapag-Lloyd Sees Uptick of Incorrectly Declared Dangerous Goods

Year-on-year increase of 65 percent; more than 4,300 cases worldwide   Container shipper Hapag-Lloyd said it registered considerably more incorrectly declared dangerous goods last year,

Containership Detained in Tacoma for Safety Violations

The 685-foot Liberian-flagged containership Westwood Robson is being held in port after significant safety violations were discovered by Port State Control officers from U.

DP World 2015 Box Volumes Rise 2.4 pct

Dubai's DP World, one of the world's biggest port operators, on Monday said its 2015 annual gross container volumes rose 2.4 percent on a like-for-like basis and

News

Hapag-Lloyd Sees Uptick of Incorrectly Declared Dangerous Goods

Year-on-year increase of 65 percent; more than 4,300 cases worldwide   Container shipper Hapag-Lloyd said it registered considerably more incorrectly declared dangerous goods last year,

US Warship Rescues Mariners in Distress

Nimitz-class aircraft carrier USS Dwight D. Eisenhower (CVN 69) (Ike) came to the rescue of distressed mariners at sea, February 7.   Ike received a distress

Baltic Index Touches New Record Low

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying industrial commodities, registered a new all-time low on Monday on muted vessel demand.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Navigation Offshore Oil Pipelines Pod Propulsion Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1396 sec (7 req/sec)