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Bank DNB sees more limited restructuring ahead for oil industry

Bank DNB sees more limited restructuring ahead for oil industry
A view of DNB bank's local office in Riga, Latvia November 20, 2013. REUTERS/Ints Kalnins/File Photo   -   Copyright  Ints Kalnins(Reuters)
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By Gwladys Fouche

STAVANGER, Norway (Reuters) – DNB <DNB.OL>, Norway’s largest bank and a major lender to the oil and gas industry, expects more restructuring in the sector but on a smaller scale than in recent years as activity and prospects have improved, the bank’s CEO told Reuters on Tuesday.

“We see some restructuring ahead, but to a very limited level. We have been through most of the cases where we have been involved as a bank,” Rune Bjerke said in an interview on the margins of an oil conference.

“There will be probably more consolidation but it will be more event-driven from now on.”

Bjerke said two areas that would continue to face challenges from overcapacity were rigs and offshore supply vessels.

“These are the two sectors where we are not through it yet,” he said, adding that while activity was improving in the sector, daily rates were still “pretty depressed”.

DNB is comfortable with its current exposure to the industry after reducing it in the past few years.

“We have taken down our oil price exposure by 100 billion Norwegian crowns ($11.83 billion) over the years. We are more or less done with the rebalancing,” Bjerke said.

“We want to stay more or less (at that level).”

(Editing by Terje Solsvik and Jane Merriman)

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