Norwegian bank DNB enjoyed another good year in shipping in 2021, raising $8bn for shipowners.
Jan Ole Huseby, global head of ocean industries, said the bond and share deals came despite “obvious challenges” during the pandemic.
Speaking ahead of the Nor-Shipping conference and exhibition in Oslo from 4 April, he said: “Last year alone we raised over $7bn in bonds and over $1bn in equity for our shipping clients.
“Obviously we had the pandemic and the changes in the world around us, but our business model is based on long-term operations, and we manage to balance risk with identifying new opportunities,” Huseby added.
Offshore wind is one of these growing areas.
Huseby said DNB has been quick to act in the sector, leveraging its track record and understanding of offshore shipping to build what he called “the leading position”.
The lender has raised more than $1bn in capital in the industry since 2020.
Turning to the energy transition, Huseby said DNB’s first job is to work hand-in-hand with clients, understanding their needs, helping them seize opportunities, and then following them through the changes ahead.
Then there is the advisory aspect.
Huseby argues that DNB sees the full picture thanks to its broad client base.
A joint effort
The bank observes how a decarbonisation development in one area can enable progress in another. “That’s incredibly useful,” he said.
“Lastly, we are committed to this transition and expect the same from our clients – leading developments and showing determination to make a difference. This is a joint effort. No one can achieve the change that is needed alone,” Huseby added.
The banker believes there has been a fantastic response to the Poseidon Principles on decarbonisation for banks.
“We now have 28 international ship finance banks, from all over the world, as signatories. Together we constitute about 50% of the global ship finance portfolio, close to $200bn," he said.
And he argues the measures have been accepted by the industry, as demonstrated by the high response rate on data submission to lenders.
More transparency
“After all, the data owners and operators have to submit is the same type of data they already report, with the same metrics the IMO uses. The industry is getting more transparent, and this builds on that trend,” Huseby added.
The executive said access to sustainable finance needs to be available for all owners, not just the big players.
“There also needs to be a balance between maintaining the integrity and level of ambition of products and instruments, whilst simultaneously keeping the administrative burden at an acceptable level for everyone,” he added.
The sustainable finance market is still under development, he explained.
Easier for the smaller owners
“As it progresses, the emergence of commonly accepted benchmarks and science-based trajectories at industry level will not only make it easier for smaller companies to access this type of finance but will also add transparency and simplify peer review,” Huseby said.
DNB saw its overall shipping and offshore, oil and gas exposure slashed by NOK 4.8bn ($544m) in the fourth quarter.
Credit quality was improved, with reversals of provisions taking place in the sectors.
The shipping loan portfolio fell NOK 3.3bn to NOK 36bn, compared with 30 September.
DNB has described these reductions as a natural process through ships sales or loans not being refinanced, rather than a strategic move.
