HSH offloads shipping NPLs totalling billions – currency exposure decreases

Banking, Shipfinance — By on June 30, 2016 at 12:14 PM
Stefan Ermisch

Stefan Ermisch

HAMBURG/KIEL HSH Nordbank transferred a portfolio of non-performing loans from ship financing with a volume of EUR 5 billion (as at 31 December 2015) to hsh portfoliomanagement AöR of majority owners Hamburg and Schleswig-Holstein effective 30 June 2016, as planned. In return, HSH Nordbank will receive the transfer price of EUR 2.4 billion set by the EU; and will offset losses of EUR 2.6 billion resulting from the transaction against the guarantee.

“The Bank will be provided with perceptible relief effective 30 June. We are improving our risk profile and balance-sheet structure significantly, we are strengthening our capital ratios and are thus taking another important step on the path to the upcoming change in ownership. We are now spinning off around 50 percent of our non-performing shipping loans. In this way we are also reducing our currency exposure at the right time because the underlying economic conditions may deteriorate following the recent political developments in the European Union. On the basis of the EU agreement alone we are planning to halve the volume of our non-performing loans from a good EUR 16 billion recorded at the end of the first quarter of 2016 to around EUR 8 billion by the end of next year”, said Stefan Ermisch, CEO of HSH Nordbank AG.

In this way HSH Nordbank is reducing its troubled assets substantially, in line with the recently completed EU state aid proceedings; moreover, with the winding-down of this pure shipping loan portfolio (256 ships) it will be less dependent on the US dollar. In accordance with the EU’s decision, HSH Nordbank is planning to sell further nonperforming loans with a volume of EUR 3.2 billion dating from the period before 2009, this time from the shipping, real estate, aviation finance and renewable energies segments, on the market by mid-2017 with hedging from the guarantee. These transactions are taking place in addition to the continuously ongoing run-down of troubled assets.

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