The biggest Nordic bank saw its shipping loan book shrink in the first half of the year.
Nordea’s loans to the sector dropped to €4.2bn ($4.6bn) from €4.7bn at the end of 2023, according to the quarterly report of the Helsinki-based bank.
Chief executive Frank Vang-Jensen said: “In large corporates and institutions we kept up the good momentum from the first quarter, actively supporting our Nordic customers with their investment plans.
“Lending volumes decreased by 2%, and deposit volumes increased by 12% year on year.”
Nordea’s total income for the quarter was €3bn, an increase of 3% year on year.
“This was another strong quarter for Nordea. Second-quarter return on equity reached 17.9%, led by growth in both net interest and net fee and commission income.
“Our results show that despite the slow economy, we continue to make good progress on our strategic priorities and deliver industry-leading financial performance,” Vang-Jensen said.
“Our risk position is sound and credit quality continues to be strong and in line with our long-term expectations. Net loan losses and similar net results were $68m, or eight basis points, mainly driven by provisions for a few single corporate client exposures,” he added.
The shipping banking unit in Norway, including Nordic and international clients, accounted for €3.8bn of the loan book.
The lending to the tanker segment — crude, product, chemical — stood at €1.5bn.
Dry cargo loans were €900m and the lending to gas tankers was €800m.
Ro-ro vessels and car carriers loans combined amounted to €300m.
The bank’s net fee and commission income grew 6% to €795m in the second quarter.
“In debt capital markets, activity remained high. We supported our customers with more than 150 transactions, as issuers are keen to front-load their funding plans in the current favourable market. Activity in the equity capital markets also showed signs of picking up,” Vang-Jensen said.
In June, Nordea helped Diana Shipping issue a $150m five-year senior unsecured bond.
Nordea’s outlook for 2024 remains unchanged.
Vang-Jensen said: “Our results for the second quarter keep us on track to deliver strong profitability in 2024.
“We expect to achieve a return on equity of above 15% for the full year and also target a return on equity of above 15% for 2025.
“We are determined to push forward with our strategic priorities and further improve customer experience and operational performance,” Vang-Jensen added.
