NordLB Back to Profit

 

The net profit of the company jumped up 70 percent in the first quarter as commission and lending income rose and as a one-off accounting gain boosted results.

 

NordLB witnessed a turnaround in its shipping unit, earning 23 million euros compared to a pretax loss of 72 million euros a year earlier.

 

It was its first profit on shipping since 2012, and the results bode well for rivals like HSH Nordbank and Commerzbank AG which also have large shipping portfolios. 

 

NordLB booked net profit of 156 million euros, up from 64 million a year earlier. The bank booked a one-off gain of 142 million euros due to hedge accounting, helping boost profits.

 

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.

 

“We had set ourselves the target for 2014 of improving on the previous year’s earnings. We have clearly achieved this target. Our earnings before taxes has almost doubled, despite the additional difficulties that could not be foreseen one year ago,” stated Dr. Gunter Dunkel, Chairman of the Managing Board of NORD/LB.

 

Business results in the Ship Finance segment continue to be affected by the global crisis in this sector. The bank has again managed to return many exposures at risk of default to a solid economic footing thanks to its active remarketing. At the same time NORD/LB significantly increased its new business activity in this segment in 2014. 

 

“We have been managing a transformation of our ship finance portfolio for some time,” explained Dunkel. “Outgoing old business is being replaced by new, attractive business. We will of course stick to our proven conservative financing principles.”