German lender Commerzbank has offloaded EUR 5.1bn ($5.75bn) of legacy loans as its shipping book dwindles.
The asset and capital recovery (ACR) segment continued to run down its portfolios, with maritime loans cut to less than EUR 500m in 2018.
This related to fewer than 60 ships.
The risk result for ACR came in at only EUR 8m due to the much lower volumes.
And the ACR operating result showed a sharp increase to EUR 34m, against a loss of EUR 264m in 2017.
Risk costs stay low
Risk provisioning for the whole group across the year was EUR 446m, which it called a low level. The figure in 2017 was EUR 781m.
"The bank benefited from the high quality of its loan books in its core segments and from the steady German economy as well as from write-backs of provisions for loan defaults in the first half of the year," it said.
The risk result for the fourth quarter stood at EUR 154m, compared with EUR 133m in the third quarter.
The "already very" low non-performing loan (NPL) ratio improved again in 2018 to 0.9% from 1.3%.
Risk-weighted assets (RWA) from credit risk increased by EUR 2.5bn in the fourth quarter, however, versus the third quarter, reaching EUR 147bn.
“Our clean balance sheet gives us scope for growth," said CFO Stephan Engels.
"We are using it successfully. This is reflected in the improved net interest income, higher underlying revenues and in the Common Equity Tier 1 ratio of 12.9%.”
Underlying revenue was up 5% for the year at EUR 8.6bn, while net profit was higher at EUR 865m from EUR 128m.
In 2019, it said the drag from the risk result is likely to be at least EUR 550m.
