Air Cargo Quarterly
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DVB bank sees tentative signs of shipping sector recovery
Depressed shipping valuations should be showing signs of a recovery by 2014, the chief executive of a German bank specializing in aircraft and shipping finance said.
“We see a bottoming out in 2013 and predict a slight recovery in charter rates in 2014,” Wolfgang Driese, CEO of DVB Bank, a unit of cooperative lender DZ Bank, told Reuters.
But he said it was too early to celebrate an end of the shipping crisis. “Some ship owners may run out of breath before the recovery bites,” he said in an interview.
The shipping sector has suffered from a slump since 2009, when shipping companies ordered large numbers of new vessels and freight rates hit record highs, adding capacity just as Europe’s economies slowed.
Top operators such as A.P. Moller-Maersk, owner of the world’s biggest container shipping company, have come under pressure, but Maersk has already said its container shipping unit has swung into the black and it expects to raise freight rates.
Shipping banks like DVB have suffered writedowns and some lenders have been forced to abandon or scale down lending to the sector. But DVB will not make a loss in 2013, Driese said.
Frankfurt-based DVB is expecting writedowns of about 70 million euros on its ship loans for this year, roughly the same level as the year before.
The lender said it has about 280 million euros worth of loans where clients are more than 90 days in arrears with payments.
DVB has also been forced to repossess 17 ships out of the 1,600 vessels for which it provided funding.
DVB said about half of its 12 billion euros loan book is to fund ships, a sector where it will continue to write new business and provide 2.5 billion euros worth of new loans.
The interbank lending and shipping crisis has forced DVB to rely on parent company DZ Bank to cover some 40 percent of its 5 billion euros in annual funding needs in 2012.
“This year we want to refinance ourselves on our own,” Driese said. DVB wants to establish a funding basis in dollars to wean itself off a dependency on expensive swaps. (Reuters)
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