Pareto Bank’s ship financing portfolio kept growing in the third quarter.
The Oslo-listed niche lender’s shipping and offshore loans rose to NOK 1.97bn ($180m) from NOK 1.81bn at the end of the second quarter.
Morten Kvalshaugen, head of shipping and offshore, told TradeWinds: “The shipping and offshore portfolio increased by NOK 164m during the quarter, mainly related to container and offshore supply.
“We still see good deal flow within offshore and expect this to continue going forward,” he added.
The shipping loan book is 8% of its total exposure.
The bank saw continued activity and financing demand within offshore but subdued demand in shipping.
Steep repayment profiles on loans affected net lending growth, it said.
The biggest segment in the book was offshore subsea, at NOK 470m, compared with NOK 490m a quarter ago. Offshore supply loans stood at NOK 380m.
The bank sees a good market balance with a robust demand outlook and low orderbooks in offshore, but weaker oil prices may lead to reduced demand for subsea and supply vessels.
Loans for bulkers amounted to NOK 248m and industrial shipping NOK 235m.
Pareto has a healthy outlook for the dry bulk market due to low supply growth but there is uncertainty on the demand side, as Chinese growth and global economic growth soften.
Container lending was NOK 150m, while product tanker loans were NOK 40m.
The bank believes fleet growth is a threat to the balance in the container market, and a reversal of the Red Sea disruption will probably lead to a drop in rates.
It forecasts strong tanker markets backed by end-user demand and longer trading distances but supply growth may put pressure on rates.
