Petrofin Bank Research from Greece has published its keenly read annual survey, which shows another $10bn wiped off the loan portfolios of the top 40 shipping banks around the world, as well as two Chinese entities holding the top spots among maritime lenders for the first time (see graph below).
“Although the shipping climate has been helpful to banks, the international banking environment remains challenging, especially for western banks, which are struggling to meet capital ratio criteria and other central bank regulatory requirements. In addition, the availability of loanable funds by western banks remains restricted and this is not supportive for a capital intensive industry, such as shipping,” commented Ted Petropoulos, head of Petrofin Bank Research.
Last year saw an overall decline in the top 40 shipping banks loan exposures by $10bn, which Petrofin suggested indicates global loan exposures may be bottoming out. This year’s research shows that since 2008, global ship finance among the top 40 banks has fallen by 25%, whilst the global fleet grew by 28%. This large differential has been taken up primarily by leasing firms, mainly in Asia. These consist of Chinese, Japanese, as well as Korean leasing companies, often linked to international Asian banks.
“Both leasing companies, as well as banks have developed a targeted appetite for the biggest clients and transactions, with small and medium size clients facing the worst both in terms of availability and terms,” the report noted. Leasing companies had a ship finance outlay of $47bn last year according to Petrofin data.