HSH Nordbank Looking to Split Off Bad Shipping Loans

Maritime Activity Reports, Inc.

May 22, 2015

Image: HSH Nordbank

Image: HSH Nordbank

 HSH Nordbank AG, the world’s second-largest financier of ships, plans to split off a "bad bank" for non-performing shipping loans as part of a plan to create a sustainable business model, reports Reuters.

 
The city of Hamburg was willing to inject billions of euros in fresh equity to stabilize the bank, which is 85 percent owned by the regional states of Hamburg and Schleswig-Holstein.
 
According to Germany's Manager Magazin, HSH's bad shipping assets would be wound down under the plan, allowing a fresh start for the remaining bank with a focus on corporate lending, including new loans to the shipping industry.
 
However, the bank spokesman Mirko Wollrab declined to comment on the report.
 
HSH Nordbank is battling with bad loans as the container-shipping market suffers a seventh year of overcapacity. The states of Hamburg, where HSH is based, and Schleswig-Holstein own 85 percent of the bank after bailing it out in 2009.
 
The biggest maritime lender after DNB ASA of Norway held 21 billion euros in shipping loans at the end of last year, about half of which were non-performing, the company said in April.
 
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