‘At the height of our new-business marketing campaign, prior to inception of our enforced re-structuring and wind-down programme in 2009, we held a portfolio which ran into several billion U.S. Dollars, very widely diversified world-wide, in terms of assets and locations. We had a geographical focus, which for me was naturally Scandinavia but which also came to include the European market in general. Subsequently, I have looked after the Latin American region and more recently the United States and Far East markets but the portfolio-split now is not so much geographical as “challenged or non-challenged” categories, in terms of borrower performance – in other words, how the client is doing! That is rated on an internal grading model that we use, which assesses risk. I look after the low-risk portfolio,’ says Lars.
‘The most important thing about ship-financing is relationships. That’s the key,’ he emphasises. ‘You have to know your counterpart. Relationships have to be managed. If you treat relationships well, they can be profitable and last a lifetime. If you burn a relationship, that blots your copy-book and the news gets around the market in no time. The shipping business as you know is cyclical and, right now, we’re in a situation where capital-providers have all the power. What is more, they are fewer and further between than when I first joined the business, which was at the start of the longest bull-run in shipping history, when you were fighting as a bank to get in the door, just to see the ship-owners!
‘We have to maintain a very open and frank dialogue with our clients and the best way to do that is to sit down in their offices and look them in the eye, so we visit them often. If we are worried for any reason, we are also able to monitor trading through vessel-tracking software. That is more the case with smaller companies that perhaps have only one or two vessels. Information ascertained may be bench-marked against research reports, particularly when analysing future cash flow.
‘Our clients operate tonnage in the dry-cargo sector, ranging from handy bulk-carriers right up to cape-size vessels and in the wet space we have financed most types of vessel extending from intermediate product tankers up to VLCCs. We also have container ships and container stock on our books. On the off-shore side, we have financed platform supply, anchor handlers, drill-rigs, drill-ships and drill support-type assets, like stand-by vessels and accommodation platforms, both floating and moored.’
When asked what gave him fulfilment in his work, Lars was spontaneous in his reply. ‘Helping companies metamorphose. Believing in a transaction or trade and helping an owner to develop, test and prove a business idea, then watch it come to fruition. That really gives me a great sense of satisfaction.’