Norddeutsche Landesbank Girozentrale, the world’s fifth-largest shipping lender, said profit will probably decline this year after the bank reported a 71 percent jump in 2011 on lower loan losses.
Net income increased to 536 million euros ($704 million) last year compared with 314 million euros in 2010, the Hanover, Germany-based company said in a statement today.
NordLB, which managed to steer through the global financial crisis in 2008 and 2009 without a bailout, expects loan-loss provisions to rise “significantly” this year because of “decreasing economic dynamics,” it said. In response, the bank plans to “stabilize” annual expenses at 1.1 billion euros in coming years to improve its ability to accumulate cash.
“It is apparent that the current year will be much more difficult,” NordLB said. “Higher risk costs are to be expected because of the economic development.”
Still, there was an “operationally good” start to 2012 with net interest and provision income developing “slightly above” 2011 levels, while the risk situation “remained relaxed,” NordLB said. Last year, loan-loss provisions dropped 68 percent to 205 million euros, the company reported.
NordLB is the world’s No. 5 shipping lender with a market share of 4.4 percent among the world’s 40 largest shipping banks, according to Athens-based vessel-finance consultant Petrofin SA. The ranking is topped by HSH Nordbank, Norway’s DNB ASA (DNB), Frankfurt-based Commerzbank AG and Sweden’s Nordea AB.
NordLB had a shipping portfolio of 19.5 billion euros at the end of last year, of which 34 percent was lending to container shipping. Pretax profit at the unit rose 14 percent to 154.6 million euros last year.
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