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Shipping losses at Nordea continue to fall

Shipping losses at Nordea continue to fall
Third quarter operating profit at Nordea's shipping, offshore and oil services group rose 45% year on year to EUR55m, as net loan losses fell 63% to EUR20m.

Loan losses at the bank's shipping arm have been falling every quarter since the EUR63m loss of the fourth quarter 2012, with operating profits rising hand-in-hand from an EUR18m loss in Q4 2012.

"Credit quality continues to improve, especially in the shipping area," the bank stated in its third quarter earnings reports "... The tanker and dry cargo markets were still weak in the third quarter, primarily due to oversupply of vessels, although an improvement was seen in freight rates for large dry bulk vessels in the quarter."

The bank also sees positive fundamentals for the coming quarters, "2013 is the last year of large deliveries of new tonnage, which should have a stabilising effect on these market segments in the medium term."

While shipping, offshore and oil services still represent the highest loan loss ratios in the company, the figure has been falling since its peak in Q4 2012 at 185 basis points, down to 68 in the last quarter.

Nordea is one of the world's largest shipping lenders, its shipping, offshore and oil services portfolio currently totals EUR11.8bn and has been in steady decline for a year, from EUR13.4bm in Q3 2012.