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ECB orders HSH Nordbank shipping book value cut without citing amount
MAJOR shipping lender HSH Nordbank has admitted that the European Central Bank has ordered it to make a write-down on its EUR20 billion (US$25.4 million) shipping book value.
A write-down reduces the book value of its shipping book asset because the ECB deems it to be overvalued compared to the market value.
A write-down typically occurs on a company's financial statement, when the carrying value of the asset can no longer be justified as fair value and the likelihood of receiving the book value is questionable.
HSH Nordbank has declined to specify the exact extent, although, there is speculation in Hamburg that the write-down was substantial, perhaps in the range of 18 to 25 per cent, reported Lloyd's List.
In a cautiously worded answer to an email question from Lloyd's List, a spokesman for the bank conceded that the write-down had been ordered, but would not divulge more.
"The haircuts in our shipping portfolio are part of the Asset Quality Review," he said. "From today's perspective they have no direct impact on our balance sheet and do not require an adaption of our accounting standards."
A write-down reduces the book value of its shipping book asset because the ECB deems it to be overvalued compared to the market value.
A write-down typically occurs on a company's financial statement, when the carrying value of the asset can no longer be justified as fair value and the likelihood of receiving the book value is questionable.
HSH Nordbank has declined to specify the exact extent, although, there is speculation in Hamburg that the write-down was substantial, perhaps in the range of 18 to 25 per cent, reported Lloyd's List.
In a cautiously worded answer to an email question from Lloyd's List, a spokesman for the bank conceded that the write-down had been ordered, but would not divulge more.
"The haircuts in our shipping portfolio are part of the Asset Quality Review," he said. "From today's perspective they have no direct impact on our balance sheet and do not require an adaption of our accounting standards."
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