German regulator asks banks to scrutinise shipping loans

Monday, 7 January 2013 00:00 - - {{hitsCtrl.values.hits}}

Reuters: German regulator BaFin has written to auditors and banks asking them to scrutinise their exposure to shipping loans as they prepare annual earnings reports for 2012, four financial sources familiar with the matter said last week.

The formal request was made in a letter sent late last year, shortly before Hamburg-based HSH Nordbank said it would raise loan loss provisions to match increased levels of default on ship loans.

Germany’s 12 largest banks had exposure of around 98 billion euros ($129.2 billion) to the stricken shipping sector in mid-2012, statistics based on mid-2012 figures showed.

Dirk Mueller-Tronnier, country leader for banking at Ernst & Young Germany said, “BaFin asked companies and auditors to put particular emphasis on shipping loans as they prepare full-year reports.” The three other sources asked not to be identified. Aside from HSH and NordLB, large banks with exposure to the shipping sector include Commerzbank and Deutsche Bank . ($1 = 0.7585 euros)