NordLB Expects Steep Losses From Soured Ship Loans
German regional wholesale lender and shipping specialist NordLB said it expected to post a "significant" loss in 2016 as it bumped up provisions for bad loans in view of the worsening shipping market.
NordLB on Thursday swung to a pretax loss of 364 million euros ($410 million) in the first half from a profit of 314 million euros a year earlier.
Loan loss provisions rose to 1 billion euros in the first six months, from 210 million in the year-earlier period, mainly because of the dire outlook for shipping.
Shipping markets have suffered years of contraction due to weaker trade flows and an over-supply of ships. NordLB this week said it was selling a $1.5 billion portfolio of shipping loans to KKR Credit and a sovereign wealth fund.
It had already reduced its shipping portfolio to 17.9 billion euros from 19.0 billion at the end of last year.