HSH Nordbank steers a clear course in the shipping business
- Operating earnings after risk provisions of EUR 248 million
- Sharp rise in new business of 37 %
- Pre-tax return on equity of 17.5 %
Hamburg/Kiel, February 27, 2007 - In 2006, HSH Nordbank generated an operating profit after risk provisions of EUR 248 million in the shipping business (previous year EUR 261 million). Despite sustained pressure on margins, net interest income increased to EUR 297 million (previous year: EUR 290 million). Net commission income came to EUR 98 million and thus matched the previous year's good result thanks to a number of major transactions. Risk provisions were increased, but they are still at a low level. The pre-tax return on equity came to 17.5 percent (previous year 20.1 percent).
“The Shipping Clients division was easily able to defend its market position as the world’s largest provider of ship finance and looks back on a successful business year,” said Peter Rieck, Deputy Chairman of HSH Nordbank’s Management Board. It is encouraging to note that we have, over the fiscal year, increasingly taken a leading position in significant international syndication transactions,” emphasized Rieck.
Strong growth of new business As financing requirements for ships remain high while competition among the financing banks is intense, HSH Nordbank generated new business of approx. EUR 10 billion (previous year: EUR 7.3 billion). Business volume rose to about EUR 30 billion during the fiscal year. In addition to the main markets involving container ships, oil tankers and bulk carriers, the Bank has increasingly assisted its clients on attractive niche markets, such as LPG tankers and offshore transactions. At the same time, robust growth of the global economy in 2006 ensured good average capacity utilization rates in the global shipping business. Strong order activity across all markets kept ship prices at high levels throughout the year.
Leading position in structured finance deals During the fiscal year, HSH Nordbank increasingly assisted its clients in tailored structured financing and services. For instance, the Bank was responsible for arranging and financing the acquisition of ferry line Silja with a volume of EUR 350 million on behalf of Tallink Grupp in Estonia. On this most promising market for offshore financing, HSH Nordbank provided a total of USD 175 million to finance seven supply ships and two specialized ships, part of which was syndicated to banks outside Germany. Moreover, there has been growing demand for innovative finance tools, for example to hedge fluctuation in the oil price.
Upbeat guidance for 2007 HSH Nordbank expects business to remain upbeat this year. The Bank will expand its position on the international shipping markets in North America, Asia and Europe and systematically strengthen its presence in the regions. To increase its commission income, HSH Nordbank aims to take on leading positions in international syndication transactions to an even greater extent. New business volumes, too, should remain at a high level in view of the vibrant markets.
With a business volume of around € 30 billion and some 2,600 ships in its portfolio, HSH Nordbank is the world’s leading ship financier. Its range of products for shipping companies operating on an international scale includes, in particular, long-term ship-mortgage loans, finance during construction as well as structured ship finance. The Bank assists its customers both in carrying out projects to build new vessels and in purchasing ships from other sources. HSH Nordbank’s business in this area breaks down into the three main markets of container vessels, tankers and bulk carriers. However, HSH Nordbank also provides customized solutions involving a large variety of specialized ships. In addition to the pure lending business, HSH Nordbank has been focusing to an increasing extent on comprehensive advisory services for all types of shipping companies. Apart from structured and innovative financing methods, the Bank also offers one-stop solutions covering all potential financial service requirements. Innovative instruments for hedging interest, currency and oil-price risks (e.g. changes in the price of bunker oil) round off the range of products on offer. Here, HSH Nordbank offers solutions that are designed to hedge the risks involved in each individual case. For more information please visit our website at www.hsh-nordbank.de.
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