German shipping banks brace for ECB test

[FRANKFURT] As the European Central Bank (ECB) prepares to test the resilience of the region's lenders, few look as exposed as Germany's shipping banks.

Before the financial crisis, many German banks pushed into the business of lending to the companies transporting the world's burgeoning trade in goods and raw materials, propelling Germany to the top spot in ship lending worldwide.

But the global economic downturn of the past five years has crimped trade flows, even as the supply of ships ordered during the boom years continued to rise, wiping out the profits that shippers need to pay off their loans and punching holes in the balance sheets of the banks that made them.