Deutsche Shipping steered a successful course in the challenging market environment of 2010. Deutsche Bank’s ship-financing business generated income before income taxes of € 76.5 million, reported the Management of Deutsche Shipping.
On September 1, 2010, Simon Booth became Global Co-Head of Deutsche Shipping. Alongside with Ralf Bedranowsky, Global Co-Head of Deutsche Shipping, and Annemarie Ehrhardt, Global Head of CRM (Credit Risk Management) Shipping, he will contribute to a sustainable profitability and a further expansion of Deutsche Bank’s global shipping franchise.
“In an extremely challenging market environment Deutsche Shipping succeeded in achieving the best results in the history of Deutsche Shipping,” said Ralf Bedranowsky and Simon Booth. At € 76.5 million, income before income taxes was 30.1% higher than in 2009 (€ 58.8 million). Profit before provision for loan losses rose to € 77 million, an increase of 14.1% over the previous year (€ 67.5 million). Net interest income and commission revenues grew by 18.5% to € 107.1 million (previous year: € 90.4 million). These results are attributable to long-term client relationships founded on trust, active risk management and global diversification of business activities, based on deep shipping industry knowledge as well as leading product capabilities.
Deutsche Shipping’s strategy focuses on further expanding business operations in the core markets of Germany, the Nordic countries, Southern Europe and Asia. New business of € 1.2 billion was consistent with the objective of targeted geographic portfolio diversification.
“Deutsche Shipping’s loan portfolio is traditionally well diversified,” explained Annemarie Ehrhardt. At the end of 2010 loan facilities amounting to € 7 billion were held available. Deutsche Shipping avoids the risk of concentration through active risk management, including diversification of vessel type, volume, age structure and country.
Overall, the shipping markets developed satisfactorily in 2010. However, there are marked differences in the development of the various segments. The container ship market performed surprisingly well. Shipping line operators, having generated losses in the previous year, produced record results in 2010. The number of vessels laid up fell from a peak of around 12% to roughly 2% of the entire container fleet.
The Baltic Dry Index was a reflection of overall profitable charter rates, mainly due to the global steel production driven primarily by China. The tanker market performed better in 2010 than in the previous year, particularly during the first six months. In the latter half of the year, charter rates were impacted by the rising supply of new ships.
Deutsche Shipping expects Asian banks to further expand their ship-financing activities. However, given the prevailing uncertainty of bank debt financing supply it remains inevitable for shipping companies to diversify their funding sources.
“While challenges in the shipping market persist, Deutsche Shipping will continue to bring innovative financing techniques to its clients. We expect the current focus on capital markets to become increasingly important for the shipping industry. As an integral part of Deutsche Bank Group, Deutsche Shipping is well positioned to offer its clients valuable financing solutions in the international capital markets,” said Ralf Bedranowsky and Simon Booth.
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