German shipping lender DVB Bank looks set to disappear as a separate name as its parent plots a merger.
Frankfurt's DZ Bank will take over what remains of the shrinking maritime financier, according to an internal memo obtained by German media.
The process is already underway, the circular revealed.
The memo mentioned next August as the earliest possible date for a transfer, but a deal could be more likely at the start of 2022.
DZ's supervisory board has not yet made a final decision on the merger, however.
The parent has seen no improvement in DVB's operations this year and believes unification is the best way to reduce further losses.
The group is not commenting on the matter.
Piecemeal sale attempted
DZ has been trying to sell parts of the transport finance subsidiary since 2018, although shipping was last in line for disposal.
The land transport business was sold to Landesbank Hessen-Thuringen. The aviation finance unit went to Mitsubishi UFJ Financial Group, but the Japanese company has since pulled out of deals to acquire the Aviation Investment Management and Aviation Asset Management divisions.
Previously, the parent had struggled to sell the whole business.
Shipping loan provisions reached $970m in 2017. Losses have totalled a further $1.2bn since then.
DVB has cut more than $1bn from its shipping portfolio, to $5.1bn at the end of June, down from $6.3bn a year earlier.
The ship finance division made a net loss of €22.5m ($27.2m) in the six months to June, compared with a €43m profit in the previous year.
Shipping accounts for 70% of customer lending at DVB.
The bank is the latest German financier to unveil a shrinking maritime portfolio and confirm a strategic shift away from shipping.
In August, Nord/LB unveiled a €1bn reduction in its shipping portfolio, which fell to €3.5bn at the end of June.
Hamburg Commercial Bank's shipping loan portfolio dropped slightly to €4.5bn at the end of June.
