FRANKFURT (Reuters) - German shipping bank DVB DVBG.F is preparing a capital increase due to losses taken on bad loans, two sources familiar with the matter said on Wednesday.
An announcement by DVB, which is owned by DZ Bank [DETGNY.UL], that it will issue new shares could come on Monday when it reports third-quarter results, one of the sources said.
The size of the capital increase has yet to be decided.
DVB and DZ Bank, both based in Frankfurt, declined to comment on a potential capital increase, news of which was reported earlier by Boersen-Zeitung.
German shipping banks like DVB, already struggling to recoup tens of billions of dollars of loans due to a global shipping industry slump, have also been hit by slowing growth in China and sluggish global trade.
In September, DVB warned investors it expects a consolidated net loss for 2016 in the double-digit million euro range.
The problems in DVB’s shipping portfolio have only worsened since then, said one of the sources, with charter rates coming under further pressure in the areas in which DVB is most active.
Reporting by Andreas Kroener; Writing by Joshua Franklin; Editing by Alexander Smith
Our Standards: The Thomson Reuters Trust Principles.