A team of shipping, offshore and finance professionals have announced plans to establish Maritime & Merchant Bank (M&M), a niche financial institution, based in Norway, that will be aimed at serving the shipping and offshore industries.
Maritime & Merchant AS (M&M AS) will file a banking license application on behalf of M&M during this autumn. Pending the successful resolution of the filing process, the bank is
expected to begin operations in the second quarter of 2014.
The managing director of M&M AS is Halvor Sveen, formerly
senior vice president for offshore and shipping at Pareto Bank in Norway.
Sveen said the the
bank is being established to meet the industry´s growing demand for
“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 said. “This
tight credit market has left many small to medium-sized owners seeking
financing with no place to go – until now.”
M&M said it will provide services such as secured lending, syndication, hedging products and payment services.
Sveen said 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 explained. “We saw a demand for a highly specialised bank with experience in the shipping and offshore industries that is able to make quick decisions.”
He said M&M will recruit shipping and banking professionals with global experience.
The board of M&M AS include include Endre Ording Sund, chairman and former CEO of the A. Wilhelmsen Group
, an Oslo-based investment company that is a major shareholder in Royal Caribbean Cruises. He said he was confident the new bank will be profitable from day one.
is right,” Sund said. “Market values in most segments are in the lower
part of the cycle, resulting in a low default risk for new loans, while
margins and fees are high. Within five years, we expect M&M to build
a substantial portfolio."
Other board members are Klaus Kjærulff, former CEO of the Danish shipping company Torm and current chairman of the Oslo-based marine insurance company Skuld; German shipowner Henning Oldendorff; Norwegian shipowner Arne Blystad; Singapore-based Norwegian investor Alex Nergaard ;and Paal Utvik, a Shanghai-based investor and partner in Landmark Holdings in Shanghai. Arne Blystad, Henning Oldendorff, Nergaard Investment Partners,
controlled by Alex and Birger Nergaard and Landmark Holdings in
Shanghai are all sponsoring shareholders of M&M AS.
The company also said the Cleaves Group, a specialist sale and purchase broker and marine finance company in the shipping and offshore segments, has been instrumental in the development phase.
Partner and director of Cleaves, Lars Edvard Høgestøl (formerly managing director of DVB Group Merchant Bank (Asia) Ltd.), said M&M "will have a simple but effective business model, the right personnel and a highly experienced and independent board. We have a strong capital base to support M&M’s expansion and will meet all regulatory requirements to operate as a bank.
"More to the point, there is a clear demand in the market for a focused bank that provides secured project lending to the shipping and offshore industries in order to help make good business ideas become a reality. We believe M&M is perfectly positioned to achieve that goal,” Høgestøl said.