Nord LB is going to remove a portfolio of shipping loans worth US$1.5 billion to KKR and another sovereign wealth fund that remains anonymous, reported the Financial Times.
Gunter Dunkel, CEO of Nord LB, said of KKR: “[it’s a] significant milestone for the bank as it continues to effectively manage its balance sheet through the ongoing shipping crisis.
“When this innovative transaction closes, it will be a significant contribution to reducing the bank’s overall ship loan exposure from EUR€18 billion to €14-€12 billion [approximately $20 billion to approximately $13 – $15 billion].”
The Landesbank, a group of state-owned banks in Germany specialising in wholesale banking, is working to distance itself from Shipping Industry loans to poor industry performance.
In a recent container Insight report it was revealed that carriers will probably lose at least $5 billion in 2016, with current losses of $50 billion since 2014, the shipping industry slump is mainly blamed on the dip in demand.