Dutch bank ABN Amro has taken an important but largely anticipated step toward its withdrawal from the US lending market with the sale of some $700m in shipping and intermodal loans to fellow European lender Credit Agricole.
The sale has been expected since ABN Amro told clients in August 2020 that it was retrenching to serve core shipping clients based in Europe, with plans to close offices in New York and Singapore.
While there was some thought ABN Amro might simply wind down the existing portfolio, a sale was the other lead option. The transfer to another traditional ship-mortgage lender rather than, for example, a private-equity firm drew positive comments on Monday.
"Absolutely," said one official with a US-based company. "I would be surprised if private equity looked at it as this portfolio was not distressed. Credit Agricole is a current lender and we have a good relationship with them."
A second owner added: "It landed in good hands."
ABN Amro said in a brief release on Monday that the loans are being sold "at around book value resulting in a negligible impact on the third-quarter profit and loss and a small positive impact on the bank’s capital ratios."
As TradeWinds reported in August 2020, ABN Amro made the pivot under a new strategic plan for a lender that has been one of shipping’s most aggressive and influential over the past decade.
Among the US-based owners with ABN Amro as part of their lending group are names such as Genco Shipping & Trading, Eagle Bulk Shipping, Diamond S Shipping, International Seaways, Scorpio Bulkers and Scorpio Tankers.
The shift in strategy was expected to affect 800 people, including around 150 in Amsterdam, with the rest in Asia-Pacific and the Americas.
It is designed to maintain the profitability of the commodities and trade desk, which includes shipping.
“Because [of] the cyclicality of these sectors, our profitability was under pressure,” spokesman Arien Bikker said last year. “We did try [to] intervene in mid-2018 to improve profitability, but it wasn’t enough.”
Global shipping head Joep Gorgels told TradeWinds at the time that European loans made up the lion's share of the shipping portfolio, which exceeded $10bn.
“We’re not pulling out of shipping at all,” he said. “It remains an important pan-European sector to ABN Amro.”
Earlier this month, ABN Amro sold a $1.5bn portfolio of loans involving 75 companies in the North American oil and gas business to private equity funds Oaktree Capital Management and Sixth Street Partners at a €135m ($160m) discount.
The sale was said to create financing pressures for already troubled US shale oil producers.
