HSH Nordbank has reported high loan loss provisions as it set aside EUR 2 billion (USD 2.14 billion) for legacy shipping assets.
The high loan loss provisions for shipping loans emerged amid the ongoing difficult development of the shipping market, while general loan loss provisions of EUR 237 million were simultaneously reversed, leaving a balance of EUR -1.76 billion to be allocated to loan loss provisions.
HSH Nordbank said that 98 percent of this figure related to legacy shipping loans in the non-core bank.
“In 2016, HSH Nordbank demonstrated the strength of its operations…We have costs under control and the bank has improved its capital ratios once again, despite the challenging conditions in the shipping business,” Stefan Ermisch, Chief Executive Officer of HSH Nordbank, said.
“The legacy assets dating from before 2009 and the complex guarantee from that year remain a considerable burden on the path towards the change of ownership in 2018. Privatisation is certainly not a foregone conclusion and it places demands on all stakeholders,” Ermisch added.
HSH Nordbank’s net profit before tax of EUR 121 million represented “satisfactory performance” in a challenging environment, but remained below the high prior-year figure of EUR 450 million.
After tax, HSH Nordbank reported a group profit of EUR 69 million for the 2016 financial year, down from EUR 98 million seen a year earlier.