Two Nordic banks stressed by failing Shipping businessFriday, 27 January 2012
Shares in Nordea and DnB NOR, Norway’s leading bank, today fell as the banks developed intense headache caused by a failing shipping business which they are exposed to. The failing Indonesian oil shipping company, Berlian Laju Tanker, warned of default on a debt of two billion dollars.
AdvertisementDnB Nor confirms to Reuters that the bank has exposure to Berlian, but would not say how big the exposure was.
About 11 percent of DnB NOR 's total loan portfolio comprises loans for shipping sector, according to Andreas Hakansson, an analyst at Exane BNP Paribas.
Reports hold that Nordea branches in Singapore joined a syndicate of six banks in which a loan of 685 million dollars was designed for Berlian Laju Tanker. The agreement was finalized in February of last year.
Nordea on its part would not go into details about the weight of its exposure.
“We can not comment on potential customers,” says Erik Durhan, press officer at Nordea.
According to Nordea's financial statements for 2011, the bank gave a total loan of €13.6 billion to the shipping sector.
That's about 2 percent of their total lending.
Analysts believe that the problems in the shipping sector will continue as such it seems the exposure had been carried out in a wrong sector.
According to reports, too many ships have been built in recent years and it continues to increase. The tonnage is still growing faster than increase in demand. This means that prices will continue to fall, according to Håkansson.
By Scancomark.se Team
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