KfW mulls ship finance expansion

Speaking to reporters at the bank's annual press event, KfW's cfo Bernd Loewen said, "I can imagine increasing the volume of our ship business - if the risk-return profile is right."

Fresh investment will likely focus on new financing arrangements for high-tech offshore wind and oil and gas vessels, a move that continues the bank's commitments in that sector. KfW leads a consortium on a EUR 937m deal for the Butendiek offshore wind farm. The offshore sector continues to outperform general shipping and high tech, high value vessels in the sector currently attract long term charters at strong rates.

The bank's ship related provisions could reach EUR400m in 2013 as freight rates remain low in a market suffering with oversupply and low demand. These provisions are expected to contribute to a reduced profit of EUR1bn for the bank in 2013, down from EUR2.4bn in 2012.

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