May 30, 2013 / 9:48 AM / 4 years ago

NordLB swings to first-quarter loss on shipping woes

* Q1 loss after tax 32 mln euros vs year-ago 118 mln profit

* Takes 241 mln euros in risk provisions

* Sees shipping industry remaining tough in coming quarters

FRANKFURT, May 30 (Reuters) - German state-owned bank NordLB said it had swung to a net loss in the first three months of the year, citing risk provisions in the crisis-hit area of shipping finance.

The bank posted a first-quarter loss after tax of 32 million euros ($41.5 million), compared with a year-earlier profit of 118 million, it said on Thursday.

“As expected, the ongoing crisis in shipping finance is a big challenges for us,” Chief Executive Gunter Dunkel said, adding the situation in the shipping industry would remain tough in coming quarters.

Banks and investment funds are increasingly looking at forced sales of ships to recoup some of the loans owed to them by shipping companies hit by a four-year sector slump, the worst on record.

NordLB, one of the world’s top 10 ship financiers, said last month it expected the shipping industry to have passed its darkest hour, though provisions would remain high this year as the sector’s recovery is slow.

NordLB said quarterly results were hit by 241 million euros in risk provisions, mainly in connection with shipping finance.

The statements chime with those of German peer HSH Nordbank , the world’s largest ship financier, which last week said it expected a loss for the current year, citing the crisis in the shipping industry as a decisive factor.

HSH in February asked for additional state aid as a result of the shipping industry crisis. ($1 = 0.7712 euros) (Reporting by Christoph Steitz)

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