The recent shipping downturn has prompted the European Central Bank to push Bremer Landesbank, a government owned lender, to solidify capital against its sluggish loans in the shipping industry.
London, England, July 20, 2016 — Weekly magazine Focus reported over the weekend that Bremer requires an additional 600 million euros in equity based on discussions between local finance authorities and members of parliament.
One source familiar with the matter is Richard Sharpe, Co-Head of Global Mergers & Acquisitions at Acom Tokyo Securities. “The Bremer situation has been the subject of animated talks recently. The ECB have most definitely been closely involved and could ultimately have their way.”
Germany has a stellar history in the shipping sector and was considered one of the world’s major hubs for general ship finance prior to the 2008 economic meltdown. Most of the country’s big banks still have approximately 90 billion euros tied up in loans to the industry.
Bremer’s umbrella company NordLB are preparing themselves for significant losses in 2016 due to their loan exposure, an insider revealed.
Rival financial houses, such as Commerzbank, have introduced safety write downs and bumped capital buffers should their shipping loans turn sour.
Neither Bremer nor the ECB were forthcoming with comment on the discussions. A spokesperson for NordLB said simply, “The Company has done all it needs to in order to shield itself from default risk.”
The Focus magazine article included estimates that Bremer may be able to summon 200 million euros from their coffers with shareholders could add 500 million more should they need to.
Acom Tokyo Securities Ltd