Germany’s Norddeutsche Landesbank (Nord/LB) decided to withdraw from the ship financing sector as it looks for a fresh start with a capital injection of EUR 3.5 billion (USD 3.9 billion).

Owing to the run down of bad loans from ship financing, Nord/LB set aside additional risk provisions of EUR 1.893 billion in 2018. Although all the bank’s other business segments remained profitable in 2018, expanding risk provisions for the ship financing portfolio led to a net loss for the year, as previously reported.

Earnings before taxes for 2018 amounted to minus EUR 2.057 billion, while consolidated profit came in at minus EUR 2.354 billion. In financial year 2017 by contrast, the bank posted a pre-tax gain of EUR 195 million.

“Such a heavy loss for 2018 is painful,” Thomas Bürkle, CEO of Nord/LB, said.

“But ridding ourselves of bad loans from ship financing will give us a new start. We now have clarity regarding the bank’s future path. We will combine the strengths Nord/LB is known for as a financier of SMEs with particular expertise in structured financing.”

Nord/LB will reinforce its capital ratio via a cash capital injection of EUR 2,835 million, in which two German federal states will participate, Lower Saxony with roughly EUR 1.5 billion and Saxony-Anhalt with roughly EUR 200 million. The Savings Banks Financial Group will provide EUR 1.135 million. Lower Saxony will also be contributing EUR 800 million in capital-relief measures, bringing the total capital to around EUR 3.5 billion.

In financial year 2018, Nord/LB made good progress in stripping the bad loans from its ship financing. By the end of 2018, Nord/LB had reduced the entire portfolio to EUR 10.3 billion.

Compared to the end of 2016, when the portfolio stood at EUR 16.9 billion, this amounts to a decrease of 39 per cent. The amount of non-performing loans (NPL) was equivalent to EUR 7.5 billion as at December 31, 2018. The NPL portfolio is to be run down as a matter of urgency.

As part of a portfolio transaction, the first step will be to transfer a significant part of the portfolio, in the amount of approx. EUR 2.6 billion to a financial investor, Nord/LB said.

In this context, Nord/LB set aside an extensive additional risk provision for the entire NPL portfolio, resulting in a total of EUR 1.8 billion for the ship financing segment for the 2018 financial year.

The total existing loan loss provisions set aside for the ship financing portfolio amounted to EUR 4.9 billion as at December 31, 2018, equivalent to a core risk coverage of 65 per cent for the NPL portfolio.

Reference: worldmaritimenews.com

The Women's International Shipping & Trading Association (WISTA) has launched its inclusion pledge which addresses the under representation of women in the maritime industry.

The pledge is a series of statements aimed at embracing diversity through individual action and personal responsibility. Individuals are encouraged to sign the pledge in support of a diverse and inclusive maritime sector. The pledge can be found online on the WISTA International website or Change.org.

Signatories of the pledge commit to "Embrace diversity of thought (including gender, race, ethnicity, and age) and contribute to a merit-based business environment within my organisation. I will be a champion of equal opportunity and equal pay. My behavior will reflect how I wish our industry to behave in the future. I will work - and encourage others to work - toward a diverse and inclusive maritime sector."

WISTA International President Despina Panayiotou Theodosiou said: "We geared this pledge to individuals, for we feel strongly that individuals have the power to bring about change."

In 2018, WISTA International appointed a Diversity Committee to focus on practical solutions to increase opportunities for gender diversity in the maritime industry. Writing a pledge to challenge the community to advance diversity and inclusion was a mandate of the committee.

WISTA has produced a Gender Diversity Manual in conjunction with ISWAN and Anglo-Eastern.

Formed in 1974, WISTA International is a global networking organization for female managers in the shipping industry, with more than 3,000 members worldwide, and 45 national WISTA associations. The number of associations continues to grow, and earlier this month a national association was established in Chile.

WISTA was approved for consultative status with the IMO in July 2018, providing the organization with a formal voice for supporting IMO work in a variety of areas. 

Last week IMO Secretary-General Kitack Lim gave an address on empowering women in the maritime community, the World Maritime Day theme for this year. The theme provides an opportunity to raise awareness of the importance of gender equality, in line with the United Nations' Sustainable Development Goals, particularly SDG5, and to highlight the important, yet under-utilized, contribution of women within the maritime sector.

Reference: maritime-executive.com