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NordLB Reports Profit as Interest Income Offsets Shipping Losses

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Nov. 29 (Bloomberg) -- Norddeutsche Landesbank Girozentrale, the world’s fifth-largest shipping lender, returned to profit in the third quarter after higher interest income offset a jump in loan losses.

Net income advanced 8.2 percent to 66 million euros ($86 million), from 61 million euros in the year-earlier period, Hanover, Germany-based NordLB said in a statement today.

NordLB reported a loss in the second quarter as Europe’s debt crisis sapped demand for seaborne goods and overcapacity put pressure on freight rates. HSH Nordbank AG, the world’s largest shipping lender, said on Nov. 6 that it expects loan-loss provisioning and default rates at its ship-financing unit to be “much higher” than previously planned into 2014.

“In the shipping markets there is still no sign of an end to the crisis that has now lasted several years,” NordLB Chief Executive Officer Gunter Dunkel said in the statement. “We know the cycles and have the staying power to overcome the crisis. With our know-how in this area, ship financing will remain a core business segment of NordLB.”

NordLB’s net interest income climbed 16 percent to 531 million euros in the third quarter, while loan-loss provisions more than doubled to 206 million euros.

While NordLB reiterated that it will post a full-year profit, earnings will be “well below” last year’s result.

To contact the reporter on this story: Niklas Magnusson in Hamburg at nmagnusson1@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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