Germany's DVB Bank shaved more than $1bn from its shipping portfolio in the past year.
It's ship loan portfolio drop to $5.1bn at the end of June, down from $6.3bn a year earlier.
The bank is the latest German financier to unveil a shrinking maritime portfolio and confirm a strategic shift away from shipping.
"DVB will continue to manage existing business as a fully operational bank," it said.
"But discontinue active marketing and in principle the origination of new business in shipping finance."
The bank said it would "honour its obligations under the current agreements in a consistent and professional way".
Shipping losses
Shipping accounts for 70% of customer lending at DVB, an affiliate of German banking giant DZ Bank.
More than half of its shipping portfolio is dedicated to tankers and a similar proportion of its customers are in Europe.
But the ship finance division made a net loss of €22.5m ($27.2m) in the six months to June, compared with a profit of €43m in the previous year.
Excess supply in shipping and the drop in the oil price had also led to impairments in the shipping division and offshore financing.
Weak outlook
The outlook for the shipping market is currently weak, the bank said.
"The reasonable optimistic outlook as per year-end 2019 for 2020 has strongly changed as a result of the Covid-19 crisis," it said.
"The general outlook for most, if not all, shipping sectors however is negative, and material short-term variations can be expected to create volatility in all shipping segments."
Rates for all sectors are anticipated to remain below average historic levels, it added.
DVB belongs to a group of German banks which are retreating from shipping.
Last week, Nord/LB unveilied a €1bn reduction in its shipping portfolio which fell to €3.5bn at the end of June.
The Hamburg Commercial Bank (HCOB) saw its shipping loan portfolio dropped slightly to €4.5bn at the end of June.
Meanwhile, Dutch bank ABN Amro has pledged to focus on its European business which makes up the lion’s share of its €9bn shipping portfolio.
