HAMBURG, April 11 Troubled transport lender HSH
Nordbank expects weak conditions in the shipping
industry to drag on for at least another 18 months and continue
to weigh on its earnings.
"Looking at the current situation, we do not expect a
sustainable improvement (in the shipping sector) before the end
of 2014," Chief Executive Constantin von Oesterreich said at the
presentation of the lender's 2012 results on Thursday, striking
a more pessimistic tone than in late 2012.
While a slew of new vessels ordered during the boom years is
still being delivered, charter rates have fallen below
break-even levels in a sector slump lasting more than four
Late last year, HSH, which is one of the world's biggest
ship financiers, had said it expected the slump to bottom out
with a pickup possible as soon as early 2014.
Maersk Line (part of AP Moeller-Maersk ), the
world's biggest container shipping operator and a barometer of
world trade as its fleet carries more than 15 percent of all
sea-borne containers, recently said markets were likely to
improve this year.
Oesterreich said a large number of debtors were not
servicing ship loans granted by HSH.
"About half of our 30 billion euros ($39.3 billion) in
shipping is facing an unfavourable situation at the moment," he
The Hamburg-based lender made a net loss of 124 million
euros last year as provisions for bad loans spiked to 656
million from 389 million in 2011.
The dismal state of its ship portfolio prompted the lender
to seek additional state aid and HSH's majority owners, the
German states of Hamburg and Schleswig-Holstein, restored
guarantees of 10 billion euros the lender had secured at the
height of the financial crisis.
While HSH last year returned 3 billion euros of that total
in anticipation of an improvement in business, it later realised
it would have to reverse the step to cope with provisions for
bad ship loans.
($1 = 0.7642 euros)
(Reporting by Jan Schwartz; Writing by Arno Schuetze; Editing
by David Holmes)