German regulator BaFin calls for scrutiny on shipping loan exposure

GERMAN regulator BaFin has written to auditors and banks asking they scrutinise their exposure to shipping loans ahead of 2012 earnings reports, says Reuters, which cited four financial sources familiar with the matter, including Dirk Mueller-Tronnier, country leader for banking at Ernst & Young Germany.

BaFin (Bundesanstalt fur Finanzdienstleistungsaufsicht) is the financial regulatory authority for Germany, supervising 2,700 banks, 800 financial services institutions and 700 insurance undertakings.

The formal request was made in a recent letter, shortly before Hamburg-based HSH Nordbank revealed it would increase loan loss provisions to match increased levels of default on ship loans.

The nation's 12 biggest banks had exposure of around EUR98 billion (US$129.2 billion) to the crippled shipping industry in mid-2012, according to statistics based on mid-2012 data.