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Nordea taking 'cautious' approach to financing land-based salmon projects

'Our margins are small and we are careful,' head of seafood at Nordea tells IntraFish.

Nordea Bank, the world's second largest seafood bank, is still seeing a bright future for salmon farming -- but its approach toward new development licenses and land-based salmon farming is a cautious one.

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"We are primarily a bank, not an investor," Louise Haahjem, head of commercial banking seafood at Nordea, told IntraFish. "If we lose one commitment, we must make up for it through other profitable engagements. Our margins are small and we are careful."

In total, the bank has around NOK 25 billion (€2.7 billion/$3 billion) in exposure to the sector through loans and credit facilities. It is the second largest seafood bank after DNB, which has an exposure of around NOK 40 billion (€4.3 billion/$4.8 billion).

"Salmon farming is, and still will be a very profitable industry," Finn-Arne Egeness, analyst at Nordea, told IntraFish.

"The industry has and still is experiencing strong growth, which is partly due to good biology and production management. In addition, downstream stakeholders have been very successful at developing new products and markets."

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Nordea has customers in fish farming, catching, processing, fishing vessels and adjacent industries such as wellboats.

"We have seven of the top 10 salmon companies as customers," Haahjem said. "These are customers who typically have syndicated loans, and several banks participate in the financing."

However, Nordea is somewhat hesitant when it comes to lending money for land-based salmon operations, as well as for projects applying for new development permits.

Haahjem said the bank is taking a "cautious" approach but is "in discussions with some."

When it comes to financing projects that fall under the new development permits, she said they "must be good and profitable projects before we enter into foreign capital financing."

She said she is also seeing good potential in the wellboat industry.

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