German shipping banks face $22 billion in losses: Moody’s

“We expect the extended downward shipping cycle to cause rising problem loans in the shipping sector during 2013-14, requiring German banks to increase their loan-loss provisions. Moody’s findings chime with those of peer Fitch, which said late in November that it expects losses from shipping portfolios to remain high in 2014, particularly for German banks. Moody’s identified DVB Bank (DVB.F), HSH Nordbank (HSH.UL), KfW IPEX-Bank (KFW.UL), NordLB (NDLG.UL) and its subsidiary Bremer Landesbank (NLAG.UL) as the most vulnerable banks. A European bank health check may trigger additional provisioning as loans benefiting from remediation measures – such as covenant waivers or an extension of repayment schedules – may be re-classified as problem loans under the new standard of the European Banking Authority, the ratings agency said.


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