HANOVER, Germany, April 6 (Reuters) - German state-backed lender NordLB said it does not need to turn to its owners for extra capital to shoulder a record 2016 loss of 1.96 billion euros ($2.1 billion), caused by 2.94 billion euros in provisions for bad shipping loans.
“We can deal with this negative result on our own,” Chief Executive Thomas Buerkle said at the presentation of the bank’s annual results on Thursday.
The bank’s capital ratio decreased to 11.3 percent at the end of 2016 from 13.1 percent a year earlier, and Buerkle said posting a 2017 profit was realistic despite the prolonged shipping crisis.
Germany was one of the world’s main centres of global ship financing before the 2008 financial crisis, and the five German banks with the closest links to the shipping industry still have around 80 billion euros on loan to the sector.
NordLB, as well as peers such as HSH, Commerzbank , DVB and KfW, have taken large writedowns and boosted capital buffers against the risk of shipping loans turning sour.
NordLB said it aimed to reduce its shipping loan portfolio to 12 to 14 billion euros by the end of 2018 from 16.8 billion at the end of 2016.
$1 = 0.9380 euros Reporting by Alexander Hübner; Writing by Arno Schuetze; Editing by Maria Sheahan