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By Jonathan Saul and Andrew MacAskill
LONDON, Dec 21 (Reuters) – Royal Bank of Scotland is close to selling at least $600 million worth of shipping loans from its portfolio, two sources familiar with the matter told Reuters.
RBS, which is more than 70 percent state-owned, is still in the throes of a restructuring, which includes asset sales, job cuts and tackling multi-billion dollar charges to settle litigation and pay regulatory fines for past misconduct.
The sources said buyers of the various shipping loan tranches included Japanese financial services firm Orix Corp , Germany’s Berenberg Bank, Bank of America Merrill Lynch and asset manager Davidson Kempner.
Bank of America and Berenberg declined to comment. Orix could not be reached for comment. Davidson Kempner and RBS declined to comment.
The loans, which primarily come from RBS’s Greek shipping business which was valued earlier this year at $3 billion, are being sold in various parcels, one of the sources said.
“Discreet sales talks have been going on for a while,” the source said.
RBS announced in September it had begun winding down its global shipping finance business, abandoning efforts at that time to sell it off during a worsening downturn across the freight industry.
Around 90 percent of world trade is transported by sea but the shipping industry is stuck in its deepest slump on record, as international trade slows and freight rates fall in a market flooded with too many vessels.
German banks, which provide a quarter of the world’s $400 billion of outstanding shipping debt, are struggling to recoup their loans, while many other lenders are looking at ending or reducing their exposure.
Sources had told Reuters earlier this year that Orix and Berenberg were among potential suitors that had looked at RBS’s Greek shipping business.
The Edinburgh-based bank which has had eight years of annual losses was rescued with a more than 45 billion pound ($55.54 billion) bailout at the height of the financial crisis.
Last month, RBS was the biggest failure in the Bank of England’s annual stress test, partly because of a mounting legal bill and the difficulty it has selling off unwanted assets.
RBS’s overall exposure to shipping exposure was 5.514 billion pounds at the end of September, down from 6.765 billion pounds at the end of June and 6.776 billion pounds at the end of 2015, RBS data showed.
RBS had previously been a top lender to the global shipping industry and its Greek office played a pivotal role. ($1 = 0.8102 pounds) (Additional reporting by Arno Schuetze in Frankfurt and Taiga Uranaka in Tokyo; Editing by Greg Mahlich and Jane Merriman)
(c) Copyright Thomson Reuters 2016.
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