Oslo-listed Maritime & Merchant Bank (M&M) has increased lending to shipping despite owners selling vessels and paying off loans in hot markets.
The Oldendorff-backed lender said the super-cycle within the container segment and a strong dry bulk market resulted in a massive gain for shipping companies and investors.
A “huge number” of vessels were offloaded and debts were cleared, the bank said.
“However, there was a high number of new projects launched and the demand for financing was maintained at a stable level, and the bank was able to deploy the capital coming in from repayments,” it added.
The net loan portfolio increased 18% during the year to $370.4m.
Dry bulk made up 48% of the book, compared with 35% at the end of 2021.
Tankers hit 39% from 36% a year ago, with containers dropping to 9% from 24%.
Net profit was cut to $147,000 from $543,000 due to a bigger tax bill of $4.1m.
There were no credit losses in 2022 and the bank has zero non-performing loans.
“Total disbursed loans since the start in 2017, financing about 140 vessels, amounts to $850m and the bank has not experienced any credit loss of significance during these six years,” chief executive Halvor Sveen said.
The loan loss allowance stood at $1.9m, up $469,000 over the year.
The increase is due to the overall portfolio being larger and the fact that there might be corrections predominantly within the bulk and container shipping segments.
“The much-talked-about and historic period that the container market has gone through has during 2022 come to an end and leaves us with a great deal of uncertainties,” the lender said.
“The fact that values and earnings massively will be revised seems to be beyond discussion; it is probably more a question whether it will be a soft landing or not.”
Its forecasts for tankers in 2023 are generally positive, which is to a large extent confirmed by the strong interest in investment in secondhand tonnage.
“The bank continues through organic growth to strengthen its operational platform and preparing the organisation for further growth and expansion,” it said.
Interest income rose to $7.6m from $5.1m year on year.
M&M Bank is 25% owned by Oldendorff and 25% by Norwegian investor Endre Rosjo’s Centennial. Deutsche Bank, SEB, Societe Generale and Klaveness Marine Finance are also involved.
