ECB Review Keeps German Shipping Banks on Their Toes

first_imgzoom German shipping banks Commerzbank AG (CBK), HSH Nordbank AG and Norddeutsche Landesbank Girozentrale are among 130 banks undergoing a review by the European Central Bank (ECB) to check their financial stability.The three banks have been clogging shipping debts as struggling container companies sought after loans to compensate for low freight rates.Preliminary findings say that each bank saw their assets devalued by as much as 18 percent in the European Central Bank’s inspection, writes Bloomberg citing a senior executive well informed of the matter.On the other hand, Reuters’ unnamed sources claim that HSH Nordbank’s core capital strength remained above the 5.5 percent minimum.The official publication of inspection results due on Sunday.According to the International Monetary Fund (IMF), the authorities were confident that German banks were generally well positioned for the exercise as they saw significant improvement in their capital ratios, but agreed that shipping loans could be a source of further impairments.A total of USD 5.4 billion was assigned by HSH Nordbank,  Commerzbank, and NordLB  in shipping loans over the past three years which Bundesbank deemed as potentially detrimental to the entire banking sector due to risks posed by low profits in container shipping industry.The banking sector in general has been under-performing and as result will need to raise equity by selling non-performing loans.World Maritime News Staff; Image: HSH Nordbanklast_img read more