In its second quarter earnings release the Norwegian bank noted that impairment losses were relatively high within shipping, compared with other sectors served by the bank.
Referring to a NOK206m rise in impairment losses year on year for the first half of 2013, the bank wrote "there was an increase [in impairments] within shipping, reflecting the sluggish market situation, especially in the tanker, dry bulk and container segments."
Collective impairment losses at the bank also rose by NOK25m with shipping again to blame, "the rise in collective impairment during the quarter reflected the continued weakening of the shipping market."
A net total of 1.71% of the bank's loan portfolio, amounting to NOK23.3bn, was considering non-performing or doubtful, up from NOK19.3bn at the same time last year. "The increase was due to the fact that a few large shipping loans were in default," the quarterly release stated, "these loans have been closely monitored for some time, and not all of them are individually impaired."
In its outlook, the bank had further bad news for the shipping sector, and said: "reduced demand from China will prolong the difficult times for key shipping segments and could result in lower oil prices".
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