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Banker warns shipowners no can left to be kicked down the road

Banker warns shipowners no can left to be kicked down the road
Things are not going to get any better for shipping in 2016 with a senior shipping banker saying this week there was no can left to kick down the road.

Speaking at the Capital Link Greek Shipping Forum, Henriette Brent-Petersen, of DVB Bank said, "2015 changed the perception of shipping and this will continue in 2016. The mindset of the banker will now not see all sectors with the same glasses.

Banks will look more carefully at the demand side, as demand is different for each sector, she said, warning, "It is going to get worse in 2016."

Generally, the bankers said 2015 was "a good year for their shipping business" but “very challenging”. Richard Jansen, Deutsche Bank’s global co-head of transportation, took the opportunity to deny rumours the bank was quitting shipping. "I wouldn’t be sitting here if we would be exiting the building,” he said, adding DB is “absolutely rock solid”.

Carsten Wiebers, director Kfw Ipex-Bank, said 2015 "was an excellent year for the shipping franchise" after "having digested the KG issues". He noted shipping is under the scrutiny of the [financial] regulators, "though it is a small part of the bank's business" this is “putting pressure on the bank".

All bankers agreed, with Citi's Michael Parker’s assessment, "the money is there for the right things", but as he also said "there is no can that can be kicked down the road".

Bankers said funds will be available to those who have funds to take advantage of opportunities, but for most it is going to be tough sailing. Jansen said "banks and customers are going to have some difficult discussions".

Michail Zekyrgias, of Bank of America Merrill Lynch, believes 2016 will be a buyers market. "There will be distress opportunities for buyers to explore.’

Jan Erik Gross, HSH Nordbank, said, "we are in crisis and facing a landslide, but this offers opportunities", advocating consolidation, “as larger operators have more bargaining power”. Gunner Cerig of EY said shipping companies could no longer rely on banks to provide a solution. He said owners approaching a bank "must have a clear plan to deal with a problem, a clear structure which is often not the case in family companies".

But, Evan Cohen, principal, DC Maritime Partners, chimed in: "Private owners want to stay in business, while equity investors will be ready to move on."