Nordea Bank to boost shipping finance for booming LNG industry
Nordea Bank aims to increase shipping finance activities to the growing liquefied natural gas (LNG)industry, executives at one of the world’s biggest shipping financiers said.
China’s crackdown on pollution and its growing demand for more environmentally friendly sources of power, such as LNG, are boosting demand for ships to transport the fuel.
“We would like to expand the portfolio and there are certain segments that we would like to expand in. One of them is on the LNG side,” Geir Atle Lerkerod, Nordea’s head of shipping for the Nordic region, told Reuters.
“We see there is an underlying strong demand over time and we see that going forward as well,” he said on the sidelines of the Nordic bank’s investor event in London this week.
LNG shipping officials at the event expected strong markets for the next two years. But they said that, with 40 to 50 LNG ships on order, a further build up of vessels through new ordering could undermine business prospects.
Nordea’s shipping and offshore portfolio stands at 9 billion euros ($10.2 billion), with LNG lending accounting for about 15 percent, which includes the financing of specialist floating storage and regassification vessels, Nordea officials said.
Thor-Erik Bech, Nordea’s head of international shipping and offshore, said the bank also wanted to boost lending to the dry bulk and tanker industries.
“We expect that 2019 and 2020 will be decent years in dry bulk and potentially a surprise on the upside as we have seen now on tankers,” he told Reuters.
Slowing orders for dry bulk vessels and tankers have helped boost prospects after years of tough conditions.
German banks were once the top global shipping financiers, but they have been exiting the market or are trying to sell billions of euros in loans, much of them non-performing.
Bech said Nordea did not want to buy portfolios from other banks.
Source: Reuters (Editing by Edmund Blair)