ABN Amro's exposure to shipping and container debt dipped by 8.8% in the first quarter as a result of the impact of exchange rate changes, according to new data.
The Dutch bank said in its quarterly earnings report that it ended the period with EUR 10.4bn ($11.9bn) in total exposure both on and off its balance sheet, including loans, guarantees, letters of credit and undrawn credit facilities both sheet.
That is a decrease from the EUR 11.4bn at the end of the year.
2.4% decline in 'ECT' lending
The dip was responsible for a 2.4% decline overall in the bank's energy, commodities and transportation (ECT) lending unit, which had EUR 37.1bn in total exposure to the three sectors as of 31 March. On-balance sheet exposure increased by 1% to EUR 25.3bn thanks to growth in energy and commodities.
Most of the loans are dollar-denominated, and the exchange rate weakened by 4.5%, pulling down the euro exposure.
The transportation segment, which involves debt for oceangoing vessels and containers, had EUR 8.9bn in on-balance sheet exposure, compared to EUR 9.3bn on 31 December.
Energy, commodities and transportation (ECT) lending snapshot
| 31 March 2016 | 31 December 2015 | |||||||
| Energy | Commodities | Transportation | Total ECT | Energy | Commodities | Transportation | Total ECT Clients | |
| On-balance sheet exposure | EUR 5.1bn | EUR 11.2bn | EUR 8.9bn | EUR 25.3bn | EUR 4.7bn | EUR 11.1bn | EUR 9.3bn | EUR 25bn |
| Guarantees and letters of credit | EUR 600m | EUR 5.2bn | EUR 200m | EUR 6bn | EUR 700m | EUR 5.5bn | EUR 200m | EUR 6.3bn |
| Undrawn committed credit facilities | EUR 2.1bn | EUR 2.6bn | EUR 1.2bn | EUR 5.9bn | EUR 2.3bn | EUR 2.4bn | EUR 1.9bn | EUR 6.7bn |
| Total on and off-balance sheet exposure | EUR 7.7bn | EUR 19bn | EUR 10.4bn | EUR 37.1bn | EUR 7.6bn | EUR 19bn | EUR 11.4bn | EUR 38bn |
But ABN Amro said that in dollar terms the transport market exposure was stable.
Undrawn shipping and container credit facilities declined to EUR 1.2bn from EUR 1.9bn.
ABN Amro said its ECT clients operate in cyclical sectors, a fact that considered carefully in its lending policies.
Watching closely
"As some of the clients in the ECT sectors face challenging market circumstances, the impact of these developments is monitored closely," the bank said.
"For example, developments in commodity prices - specifically the price of oil - and the dry bulk and container markets are continuously subject to stringent credit monitoring and close risk management attention."
