DVB to Seek Capital Increase

Posted by Joseph Keefe November 14, 2016

German shipping bank DVB confirmed it will seek a capital increase after saying on Monday it expects an even bigger than forecast net loss in 2016.

Reuters reported last week that DVB, which is owned by DZ Bank, was preparing a capital increase due to losses taken on bad loans.

"DVB's parent company, DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main, intends to strengthen DVB's capitalisation through appropriate measures, also against the background of stricter capital requirements for banks," DVB said in a statement.

The capital increase is expected to be between 100 million euros and 200 million euros, according to one source familiar with the matter.

DVB also said DZ Bank now plans to buy the roughly 5 percent of outstanding DVB shares it does not already own.

German shipping banks like DVB, already struggling to recoup tens of billions of dollars of loans due to a global shipping industry slump, have also been hit by slowing growth in China and sluggish global trade.

For the first nine months of 2016, DVB posted a consolidated net loss before taxes of 23.6 million euros.

DVB had already warned investors in September it expected a consolidated net loss for 2016 in the double-digit million euro range. It has now predicting the loss to be "in a low negative triple-digit million euro range".