Deutsche Bank’s $1bn Shipping Idea


In a bid to lower exposure to lenders who are being scrutinised from the European Central Bank, Deutsche Bank has announced that it is to sell shipping loans totalling US$1 billion, according to Reuters.

An unnamed finance source said: “They are looking to lighten their portfolio and this includes toxic debt. It makes commercial sense to try and sell off some of their book. They are not looking to exit shipping.”

Another unnamed banking source said: “Every bank with a significant amount of shipping loans is evaluating options to sell some of them. The ECB probe has encouraged banks even more to pursue sales.”

PTI previously reported that German Bank Joh. Berenberg Gossler & Co. KG has signed a Memorandum of Understanding with an international investment firm to secure $500 million in private equity for ship loans.

The uncertainty surrounding loans is being caused by the fact that the shipping market is volatile, which has been caused by lowering freight rates, weak demand and a glut of ships.

In the container market, 5,000 TEU neo-Panamax ships are currently being demolished in a bid to counter this imbalance in supply and demand.

Despite the difficulties, shipping carrier Maersk Line recently saw a profit in Q1, 2016, with shares jumping by 24%, causing the majority of analysts to advise investors to buy now.

Maersk is currently going through a major change, after it was announced that the shipping arm’s CEO, Søren Skou was to be made CEO of parent company Maersk.

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