Commerzbank Reduces Shipping Loans by USD 2.7 Bn

Image Courtesy: Commerzbank AG

Germany’s financial services company Commerzbank continued with its efforts to dispose of bad shipping loans in 2017. 

The bank said its ship finance portfolio was reduced from EUR 4.8 billion (USD 5.9 billion) to EUR 2.6 billion (USD 3.2 billion) during the previous year.

Only in the first nine months of 2017, the bank’s shipping portfolio was reduced by more than 30 percent to EUR 3.3 billion, in line with its plan to get rid of non-performing shipping loans. In its Q3 results, Commerzbank said it was on track for a year-end target of around EUR 3 billion.

As explained, Commerzbank’s run-down segment benefited from the accelerated reduction of the ship finance portfolio.

The bank recorded a slight decrease in its operating profit which dropped to EUR 1,303 million in 2017 from EUR 1,399 million in 2016.

Revenues excluding exceptional items rose to EUR 8.61 billion in 2017 from EUR 8.57 billion reported a year earlier.

In addition, loan loss provisions stood at EUR 781 million in 2017, against EUR 900 million seen in 2016.

“In 2017 we invested in growth, digitalisation and regulation, while keeping our costs stable,” Stephan Engels, Chief Financial Officer of Commerzbank, said.

“The revaluation of our ship finance portfolio under IFRS 9 will minimise future burdens and has resulted in a CET 1 ratio of around 13.3 percent at the beginning of 2018. This gives us room for further investments in growth and for driving the digitalisation of the Bank forward,” Engels added.

 

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