Deutsche Bank Seeking to Sell Some of its Distressed Shipping Loan Portfolio to Raise Capital

This is code talk for getting the hell out of Greece. Where do you think these so called shipping companies reside?

Deutsche Bank is joining a cadre of other European banks in a race to reduce exposure to the beguiled shipping industry.

“They are looking to lighten their portfolio and this includes toxic debt. It makes commercial sense to try and sell off some of their book,” one finance source said. “They are not looking to exit shipping.”

Deutsche Bank, which has around $5 billion to $6 billion worth of total exposure to the shipping sector, declined to comment.
Germany was one of the world’s main centers of global ship finance before the 2008 financial crisis, and lenders there still have around 80 billion euros ($88.62 billion) on loan to the sector.

“Every bank with a significant amount of shipping loans is evaluating options to sell some of them. The ECB probe has encouraged banks even more to pursue sales,” another banking source said.

“However, it is difficult to agree with buyers on the mix of the portfolio such as performing, less performing, non-performing loans and different types of ships.”

Royal Bank of Scotland is also looking to divest its Greek ship finance business, which is worth around $3 billion, Reuters reported in June.

“It is going to become a more crowded market place and any buyers for these portfolios will want a bigger discount now,” another finance source said.

Wall Street smells desperation. The fact that DB is raising capital by offloading distressed assets is somewhat disconcerting. The stock is getting rocked, down to historic lows.

Again, $18 bill market cap with a balance sheet of $1.8 trillion. I couldn’t care less what their NPLs are. DB is a sell.