Denmarks largest bank, Danske Bank, does not expect the shipping market to improve any time soon.

“2013 will be another difficult year,” the bank tells ShippingWatch, pointing to several negative factors.

The crisis in the shipping sector can be felt clearly at Danske Bank, with the bank having to perform significantly bigger impairments in the third quarter this year, compared to the same period last year. This development is especially caused by the Danish and Nordic customer relations in the shipping industry, and the bank does not expect this to improve in 2013.

More accurately, the bank had to write down USD 197 million on loans to “shipping and transportation,” a number that was less than a tenth in 2011, at USD 19.5 million. The vast majority of that amount comes from shipping.

“A big part of the business is not doing well. This includes container, dry bulk, and tank, all of which are struggling with low rates. As the situation is now, there’s no immediate prospect of an improvement.

The development of the world economy does not favor the market. There’s more tonnage coming into the market, and there’s no sign that the rates will increase in any siginifcant way, we therefore expect that 2013 will be another difficult year.” says Danske Bank’s Head of Investor Relations, Martin Gottlob, to ShippingWatch.

Danske Bank, however, is far from close to an exit from the shipping segment - as announced by other, for instance German, banks. Like Nordea, Danske Bank will hang on to its engagement with the sector.

“In spite of the developments, we’re not about to leave shipping. We can’t say how we’re going to invest, or whether there are segments we’ll focus on more than others. We’ll make those decisions on a case by case basis,” says Martin Gottlob.

The bank performed write downs for a total of USD 1.7 billion in the first three quarters of 2012, which corresponds to 0.68 percent of the total loans and guarantees, compared to 0.58 percent in the same period 2011. The bank points to shipping as one of the reasons for the increase.

(ShippingWatch 2012)