Prolonging the Inevitable

The shipping industry’s time-hewn and painful tendency to flood a recovering market with tonnage was affirmed once again last week when the Bonn government’s public-law bank, Hamburgische Landesbank (HL), disclosed not only its record after tax profit of Dm 50 m, but also the explosive growth of its ship lending portfolio.

With more than two-thirds of its financed fleet between the ages of one and six years, HL is a falling barometer of that dizzying race to build vessels at the first subtle hint of a bullish market, even when capital returns hardly justify the risk assumed by the lender. And so the cycle goes.

This is only an excerpt of Prolonging the Inevitable

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