Nordea lowered its exposure to shipping and offshore

Nordic banking major Nordea has lowered its exposure to shipping and offshore throughout 2020, shows the bank's interim report. During the third quarter, the bank booked new impairments on its loans to the sector.

Photo: Ints Kalnins/Reuters/Ritzau Scanpix

Throughout 2020, Nordea has reduced its lending to the shipping and oil sector.

Over the past three months, the Nordic banking major has shaved nearly EUR half a billion off its total loan portfolio within shipping, offshore and oil services, shows the company's interim report published Friday.

Nordea's loans to the sectors now total EUR 7.2 billion, which is EUR 1.4 billion less than by the end of the third quarter last year.

The reduction has, among other things, been made in the tanker sector, which is reduced by EUR 100 million. However, the segment is still where Nordea has its largest exposure within shipping, offshore and oil services with loans totaling EUR 2 billion.

Nordea's net loan losses were "close to zero" in the third quarter, according to the interim report, and resulted in a reversal of EUR 2 million. This happened after net losses on "individual exposures" totaling EUR 59 million and a reversal of former provisions totaling EUR 61 million.

In terms of the losses themselves, shipping and offshore, however, play a significant part.

"The main driver of the individual loan losses was increased provisions on Maritime and Oil, gas and offshore exposures in Large Corporates & Institutions. However, these were balanced by reversals, resulting in individual net loan losses of EUR 30m," writes Nordea in the report.

At another major Nordic bank, Norway's DNB, offshore accounted for more than half of the bank's non-performing loans in the third quarter.

The offshore sector accounted for 60 percent of the bank's impairment provisions, while shipping on the other hand fared surprisingly well.

Nordea exited the third quarter with an overall profit of EUR 837 million, which is a significant improvement compared to the same period last year, which ended in an EUR 332 million deficit.

English Edit: Ida Jacobsen

Danske Bank sees difficult conditions for restructurings in offshore and drilling

Offshore sector accounts for more than half of DNB's non-performing loans 

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