New maritime bank to be set up in Norway

A team of shipping, offshore and finance professionals will establish the Maritime & Merchant Bank (“M&M’’), described as a niche financial institution dedicated to meeting the funding needs of owners active in the shipping and offshore industries, worldwide. A project company, Maritime & Merchant AS (M&M AS), has been established to file a banking license application during the autumn of 2013.

M&M will focus on the maritime and offshore industries, providing services including secured lending, syndication, hedging products and payment services. Pending the successful resolution of the filing process, the bank is expected to begin operations in the second quarter of 2014.

According to MD of M&M AS Halvor Sveen (formerly senior vice president, offshore & shipping at Pareto Bank), the bank is being established to meet the industry´s growing demand for financing. “Over the past four years, the introduction of stricter capital requirements has forced many banks to either discontinue lending to owners or scale back on activities in ship finance,” he says. “This tight credit market has left many small to medium-sized owners seeking financing with no place to go – until now.”

Sveen adds that established banks with diverse investment portfolios unrelated to the shipping and offshore segments have been forced to introduce tighter lending controls to maintain their activities in core business areas. “Owners have turned to alternative sources, such as the bond market, private equity and export credit agencies, to fill the gap,” he says. “We saw a demand for a highly specialised bank with experience in the shipping and offshore industries that is able to make quick decisions.”

The news will no doubt be of interest to those at the recent Motorship Gas Fuelled Ships conference who heard the presentation from Fredrik Mordal Hessen of DNB Bank who described the current reluctance of established bankers to provide finance for high-technology eco-ship projects when the technology was untried and the rules yet to be firmly established.