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Lending to Greek shipowners rises in 2014, first time for four years

Lending to Greek shipowners rises in 2014, first time for four years
Greece’s shipowners appear to have regained the support of the world’s banking community as they go about expanding their fleets. In 2014 lending to the country’s shipping shows a year-on-year increase of 4.1%, the first such rise since 2009.

The overall Greek loans, drawn and committed but undrawn, booked both in Greece and worldwide as of 31December 2014 reached $64.019bn compared to $61.498bn in 2013.

Specifically, according to Petrofin Research’s 14th annual review of bank loan portfolios to Greek shipping, drawn loans are up 2.85% and commitments by 18.11%, the latter prompted by massive Greek newbuilding orderbook.

But, Petrofin Research head, Ted Petropoulos notes this is only part of the story as Greek owners turn to non-bank financing. He says: “The banking ship finance market shall continue to be restrained in the years to come and Greek ship lending is not expected to rise in line with the development of the Greek fleet and the level of newbuilding deliveries, as owners shall increasingly rely on non-banking sources of finance, as well as their own resources, to meet the industry's challenges.”

In all, at the launch of 2015, some 49 banks had Greek ship owners on their books, five of them Greek banks.

European banks continue to account for the vast majority of total loans, but their share is down to 85.44% from 90%. RBS remained the market leader but its $7.6bn portfolio represents a reduced market share down to 11.87% from 16.5% a year earlier.

Petrofin reports lead managers in syndicated loans are slightly down, by 1.86%. Forward commitments to newbuldings have decreased as a percentage of committed loans. But in numerical terms, they are substantially higher than the year before.

Of the five Greek banks, two, the National Bank of Greece and the boutique bank, Aegean Baltic bank, increased their business by 7.33% and 12% respectively, with the other three showing minor decreases. However, Piraeus Bank, a major backer of domestic shipping has cemented its position as top Greek lender and fourth overall, its $3.85bn ($3.9bn in 2013) is only behind RBS, Credit Suisse’s $6.19bn and DVB’s $4.547bn.

Overall, Greek banks' exposure is up by 3.17%, reflecting the increased stability in 2014 for Greek banks. This increase is the first sign of a recovery, since 2008.

International banks with a Greek presence continue to reduced their exposure, in 2014, down by 4.23%, compared to a reduction of 9.35% in 2013 and a reduction of 3.9% in 2012.

On the other hand, international banks without a Greek presence show an impressive increase of 17.23%.

The number of banks involved in Greek ship finance has risen to 49 from 46 banks last year, as some new players now entered cautiously.

The top 10 Greek ship financing banks have reduced their portfolios by 4%, resulting to a decrease in their market share to 57.24% ($36.6bn) from 62.38% in the previous year ($38.3bn). But the next 10 banks have increased their market share 3.05% to a 17.6% slice or $17bn from $14.46bn.

European banks continue to account for the vast majority of total loans, but their share is down to 85.44% from 90%.