Norwegian ship financing giant DNB has rep[ds_preview]orted a 22% profit drop for 2016. Increased impairment losses and non-performing loans in offshore and shipping portfolios take a major share of burdens.
The profit for the year decreased from 24.8 to 19.3 billion NOK, what the bank named »solid profits despite an increase in impairment losses in oil-related industries and shipping«. Pre-tax operating profit before impairment was NOK 30.8 billion NOK, after 34.1 billion NOK in 2015, the return on equity dropped from 14.5 to 10.1 %, DNB said in a statement.
»Overall, we are pleased with DNB’s performance in 2016, in spite of higher losses and large currency fluctuations«, the groups CEO Rune Bjerke was quoted. He added, that DNB is planning a share buy-back programme to be implemented in the course of 2017.
The impairment losses mainly related to large international companies within oil-related industries. Impairment losses on loans and guarantees totalled 7.4 billion NOK in 2016, up 5.1 billion NOK from 2015. »Total impairments losses for 2016 were mainly related to shipping, offshore and energy in the large corporate and international customers segment«, the bank said.
Net non-performing and doubtful loans and guarantees amounted to 25.7 billion NOK at end-December 2016, up from 14.0 billion NOK at year-end 2015. According to the statement, net non-performing and doubtful loans and guarantees represented 1.49 % of the loan portfolio, an increase of 0.73 percentage points from end-December 2015. Again, the increase in non-performing and doubtful loans and guarantees is linked to shipping, offshore and energy in the large corporate and international customers segment.
