Restructuring German lender Nord/LB has rid itself of another €900m ($989m) in shipping loans in the first quarter, as the coronavirus outbreak hit its result.
The size of the maritime portfolio at 31 March was €3.7bn, compared to €4.6bn at the end of 2019, a spokesman told TradeWinds.
"The reduction of the remaining portfolio will be consistently continued in the current financial year," he added. "So far the exit is progressing as planned."
Nord/LB had 535 ships on the books at year end, but this is now 450.
The 2019 reduction followed the sale of a number of loan portfolios to private equity buyers last year, such as the €2.6bn disposal of a 263-vessel portfolio to Cerberus Capital Management last April.
Efforts to reduce Nord/LB exposure have largely centred on the sale of its non-performing loan (NPL) portfolio, which stood at €2.5bn at year-end.
The bank has said expects to cut that to under €1bn by the end of 2020 and for its NPL portfolio to be "almost completely eliminated" by the end of 2021.
Red ink in 2020
Nord/LB posted a net loss for the first quarter of €71m, compared to profit of €54m in 2019.
Net interest income was up at €271m, from €258m, but the bank was hit by fees for portfolio guarantees, as well as valuation effects due to the pandemic.
"We have so far managed the corona crisis well in operative terms," said chairman Thomas Burkle.
"Apart from some fair-value effects, the crisis has not yet been reflected in our figures for the first quarter. However, it is very likely that it will still have a considerable negative impact on earnings for us as well. However, it is still too early for a more concrete forecast."
The lender has processed around 2,250 applications so far this year for state promotional credits in the crisis. These are worth a total of €1.6bn.
Risk provisioning saw reversals of €37m, just shy of the €38m logged last year.
"The reduction of the ship financing portfolio again had a positive effect," Nord/LB said.
But the company added: "The real economic effects of the corona pandemic have not yet been reflected here."
