Germany's Commerzbank is getting closer to exiting shipping finance for good.

It said its vessel finance portfolio contracted to around EUR 300m ($335.65m) in the first quarter.

By the end of the period, this volume related to only 38 ships.

In 2018, the lender offloaded EUR 5.1bn of legacy loans as its shipping book dwindled.

The asset and capital recovery (ACR) segment continued to run down its portfolios last year, with maritime loans cut to less than EUR 500m by the end of December.

This related to fewer than 60 ships at the time.

The bank has pledged for years to exit shipping.

First quarter ACR revenue fell to EUR 11m from EUR 45m a year ago.

This was due to a further run-down of legacy portfolios which were reduced by a total of EUR 300m in the quarter.

Non-performing loan ratio stays low

ACR logged an operating loss of EUR 7m, from a profit of EUR 16m in 2018.

The risk result remained low in the first quarter, it said, with losses coming in at EUR 78m, from EUR 77m a year ago.

Commerzbank benefited from lower loan losses, which "even offset the effect of write-backs of loan loss provisions in the previous year", it said.

The non-performing loan (NPL) ratio remained very low, at 0.9%, from 1% in 2018, it added.

"It reflects the still favourable credit environment, as well as the bank’s prudent lending standards and high portfolio quality," the lender said.

Net profit was down at EUR 120m, from EUR 262m in 2018, while net interest income grew to EUR 1.23bn from EUR 1.09bn.

Last month, Deutsche Bank called off a potential merger with Commerzbank, saying it would not create enough benefits.