Commerzbank cuts shipping loan exposure to 17b euros

Commerzbank AG, the German lender trying to offload soured shipping loans, reduced its credit portfolio in the crisis-hit sector by 7.1 per cent in the second quarter even as it stuck to its forecast that the market will not bottom out until 2014.
Commerzbank's Deutsche Schiffsbank unit reduced its exposure at default to 17 billion euros (S$29 billion) from 18.3 billion euros in the first three months of the year, including 4.6 billion euros in bad debt, according to a company presentation on Thursday, when the Frankfurt-based lender reported quarterly results.
The collapse of Lehman Brothers Holdings Inc in September 2008 and the ensuing debt crisis in the euro area propelled the shipping industry into a slump from which it has yet to recover, damping demand for seaborne transport and generating a glut of vessels.
"In the first half of 2013, market trends in the container, tanker and bulker segment were still dominated by excess capacity, putting pressure on and causing declines in charter rates," Commerzbank said in the interim report.
Source: Business Times