27th annual ship finance & investment forum 2014 london 5th – … · 2018. 4. 12. · an...

presented by

Ted Petropoulos HEAD

PETROFIN RESEARCH

27th Annual Ship Finance & Investment forum 2014 London

5th – 6th November 2014

An overview of the Global Ship Finance industry

Presentation outline

1. The global ship finance market

3. What is the current attitude to risk among top bankers?

Top Bankers’ Survey

4. What is the risk appetite for shipping finance by banks?

2. Current ship finance trends

5. Summary and Conclusions

PETROFIN RESEARCH www.petrofin.gr

• Global ship lending figures (drawn and committed) as of October 2014 are estimated at $475bn (Petrofin Research ©).

• The above includes the offshore support sector but excludes rigs and shipyard finance



• The above totals may still underestimate the contribution of Far Eastern and Middle Eastern banks which do not make their figures readily available.

• Given the total no of vessels in the global fleet of 89,384 in November 2014, up from 87,369 of November 2013, (Clarkson’s World Fleet Register) of all types, sizes and ages, the average debt amounts to $5.31 per vessel.



• In Graph 1, we present the latest Petrofin Bank Research ©, on the shipping loan portfolio of the top 40 global ship finance banks representing $391.45bn of total loans (82.24% of the total, as opposed to 86% of 2013’s total).



Top 40 ship finance banks’ portfolios stands at US$391.45 as of November 2014:

Top 40 banks as of November 2013 - Top 40 ship finance banks’ portfolios stood at approximately at $401bn

Bank Lending to Shipping Ship finance based on interim data up to November 2014 – in $bn


* Market estimate ** Winding down portfolios

28.30 21.98

20.00 19.80

18.30 17.50

17.00 16.00

15.50 15.00

14.22 14.00

13.80 12.80 12.80

10.00 10.00 10.00

8.46 8.30 8.23 8.14

7.50 6.59

6.20 5.50

5.00 5.00

4.50 4.00 4.00 3.90

3.20 2.50 2.50 2.50 2.44

2.00 2.00 2.00

0 5 10 15 20 25 30

DnB

HSH Nordbank-only core

Bank of China*

KfW

Nordea

ICBC*

Korea Exim*

Commerzbank*

DVB

BTMU*

RBS

China Exim

Nord LB

BNP Paribas

Credit Suisse*

HSBC

Credit Agricole*

SMBC*

ABN Amro

Citibank

Bremer Landesbank

Deutsche Shipping - Deutsche Bank

ING

Danish Ship Finance

Unicredit

Standard and Chartererd

DBS (Development Bank of Singapore)

Santander*

SEB*

Danske Bank/Fokus Bank*

Japan Bank for International Co-operation*

Piraeus Bank*

National Bank of Greece

Lloyds Banking Group**

NIBC

Commonwealth Bank of Australia*

Alpha Bank

Societe General*

Deka*

CIT Group*

Bank ship finance based on data up to November 2014 – in $bn

Top 40 Bank Lending to Shipping PETROFIN RESEARCH

www.petrofin.gr Graph 2

Source: Petrofin Bank Research November 2014

462.9

436.18

449.76

454.89

422.135

400.89

391.45

340

360

380

400

420

440

460

480

2008 2009 2010 2011 2012 2013 2014

• Last year, the top 6 banks’ share was approx. 30.7% (with a combined portfolio of $123.06bn).

• This year the top 6 banks’ share is 32.16% (with a combined portfolio of $125.88bn)

• Lastly, European bank exposure accounts for 70.55% in November 2014. Last year, European bank exposure accounted for 71.61% in November 2013 . Going back, they held 83.12% of the top 40 total in 2010 and 81.69% up to November 2011 and 75.13% in November 2012.



Top 40 banks in terms of geographical position, portfolios and percentage hold of the totals – 2010 to 2014

PETROFIN RESEARCH www.petrofin.gr Source: Petrofin Bank Research November 2014

Graph 3

-$40.00

$10.00

$60.00

$110.00

$160.00

$210.00

$260.00

$310.00

$360.00

$410.00

$460.00

Europe USA Far East and Australasia

$373.86

$9.50

$66.40

360.88

7.51

86.50

317.14

12.00

93.00

292.09

10.80

98.00

276.15

10.30

105.00

2010 2011 2012 2013 2014

Graph 4

Germany

Holland

France and Belgium

UK and Ireland Other

Greece

PETROFIN RESEARCH www.petrofin.gr European banks – Comparison between 2010 and up to

November 2014

0

20

40

60

80

100

120

140

160

UK and Ireland France and Belgium Holland Germany Greece Scandinavia Other European

53.86 36.7

13

154.44

12.78

82.58

20.5

53

32

18

151

10

82

15

44

27

18

141

6

67

15

39

27 20

113

7

67

20 32

23 18

112

10

62

20

2010 2011 2012 2013 2014

Graph 5

Germany

Holland

France and Belgium


Greece


2008 - Value of Shipping Deals by Transaction Type (mil)

4%

0%

0%

4%4%

1%

5%

82%

Corporate Bond: $3,872

Convertible Bond: $325

Bank Loan: $83,630

IPO: $4,095

Follow-on: $4,155

Private Placement: $859

Equity (Other): $0

Leasing: $4,892

2013 - Value of Shipping Deals by Transaction Type (mil)

18%

1%60%

2%6%

7%

3%

3%

Corporate Bond: $11,330

Convertible Bond: $842

Bank Loan: $39,290

IPO: $1,565

Follow-on: $4,159

Private Placement: $4,469

Equity (Other): $2,204

Leasing: $2,306

Source: Dealogic

Trends in Ship Finance Sources

Germany

Holland

France and Belgium


Greece


Spreads paid by Borrowers, 2005-2014 (bps)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2005 2006 2007 2008 2009 2010 2011 2012 2013

0

50

100

150

200

250

300

350

<100

100-199

200-299

300-399

400-499

Average Spread

Average Loan Pricing

Source: Marine Money Bankers Survey 2014

1. In the last twelve months, (October 2013-October 2014), the total number of oil tankers, bulkers, containers and offshore vessels rose from 31,575, to 35,296, i.e. a rise of 11.78%, compared to a rise of 8.3% last year. (Clarkson’s World Fleet Register).

2. Despite the above, total bank ship finance debt is still fallling, especially for the top 40 banks. This relates to deleveraging by banks and increasing reliance on other forms of finance and capital.

2. Current Ship finance trends


3. Further shipfinance global reductions are anticipated for the next 1-2 years but the decline is expected to start tailing off. Downward pressures are due to:

a) controlled new lending, b) repayment of existing loan portfolios, c) active loan recoveries, d) shift of risk from banks to equity funds via sale of distressed and non core assets. e) shrinkage of a number of large shipping banks, and f) slowdown of lending by Chinese banks.

4. However, the tailing off is associated to:

a) passing of ECB stress tests by all the European shipping banks

b) Attractive risk/rewards of lending to targeted clients,

c) Clean up loan portfolio provides growth opportunities, and

d) Low value of vessels offering a better timing for new loans.



5. Global banking conditions (especially in the West) still remain unsupportive for ship finance (Basel III, liquidity and capital constraints), but the tide may be turning.

6. Current estimates by IMF, OECD, Clarkson’s for 2014 international trade growth is approximately 4%, rising to 5-6% in 2015.

7. The fleet growth for 2014 and expected 2015 has decelerated, i.e. to 3.6% y on y growth in dry bulk. It is anticipated that as newbuilding orders in dry bulk have significantly slowed down and as newbuilding deliveries may be extended that the fleet growth for 2015 and 2016 may not exceed international trade growth.

8. The wet sector is showing a slowdown in net fleet growth to near zero but at the same time stagnant demand. The low orderbook and a possible recovery in oil demand as a result of a pick up in global economic growth, may herald an improvement in the prospects of the wet sector in 2015.



9. However, fleet supply growth is constrained by increased port congestion, slow steaming and longer routes despite a 25% reduction in scrapping in 2013 thus far.

10. The fall in oil prices, if accompanied by a recovery in the shipping market, may result in reduced slow steaming.

11. Bank shipping loan provisions are peaking due to a) accelerated loan recoveries, b) sell off of portfolios, c) reduction of shipping exposure and d) shifting of risk between clients.

12. An increasing number of shipping banks’ loan portfolio sales have been achieved and / or are in progress involving RBS, Commerzbank, HSH, Lloyd’s Banking Group and others.



13. Equity funds’ interest in buying banks’ loan portfolios has increased. This is directly related to the more attractive sale price set by banks for buyers due to poor shipping markets, declining loan values, poor client cashflow, pressure to dispose by central banks and higher discount values.

14. Banks who became unwilling owners of shipping companies / vessels, e.g. Torm, Genmar, Exel, etc. have sold their exposures to equity funds.

15. Shift of ship finance eastwards continues but not at a slower pace.

16. Far Eastern ship leasing, export finance and bareboat deals only shall accelerate if a) market conditions improve and b) Chinese lending restrictions are eased



17. Private equity funds’ interest in shipping (Oaktree, Carlisle, Blushore Global Equity, Monarch Alternative, Nordic Capital, Eaton Park Capital, etc.) which exploded in 2012-2013, has now reduced to specialised sectors only. As equity funds have not achieved their rewards yet and some are showing negative returns, their commitment to shipping and patience is expected to be tested.

18. Private equity provided by individuals too has accelerated as there are powerful incentives for investing in shipping, e.g. real asset, still cash on cash positive earnings, tax, recovery. Hence, private equity has the advantage over equity funds, as it has a longer investment horizon and less pressure to exit at specific times.



2008 20092010 2011

20122013

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Private Equity Investment in Shipping

Source: Marine Money International,

January 2014

Graph 7

19. Cohabitation in loans/investments became more commonplace between banks, owners and equity providers. Some banks still remain wary of such cohabitation, whilst others, e.g. DVB, CIT are positive towards them. Main risk appears to be what will happen if expectations as to a market recovery do not materialise and an exit en masse is sought.

20. Client selection has become excessive. The level of due diligence has intensified and is seen by many owners as being intrusive and extreme. Only 10% of initially promising loans make it to drawdown, but such ratios are now rising, as both banks and owners become more familiar with which loans can be approved.

21. As the dry bulk market has fallen, hunting licenses by banks earning substantial commitment fees are expected to rise.



22. Has the ship financing model changed? Not really, but overall lending percentages have fallen, terms tightened, liquidity issues have risen to the top spot and banks revel in the prevailing low competition environment.

23. Absence of ship finance and / or availability only under expensive/stringent conditions has resulted in many vessel purchases for cash. Given the low US Dollar deposit interest rates, shipping investments appear to still be attractive.

24. The favourable to banks ship finance terms and conditions have brought forward a number of new and re-entering players, such as, CIT, RBC, Bank of Nova Scotia, HSH, Unicredit, Eurobank and others.



25. The number of existing players with a growing appetite is small but growing, e.g. ABN, Citi, Credit Suisse and all the Far Eastern Banks.

26. Most analysts still point to 2015 for a meaningful shipping and banking recovery assisted by robust increases in international trade. However, international growth expectations and global economy conditions remain at risk. Moreover, China and the Far East appear to be slowing down, except for Japan, which has recently committed to substantial quantitative easing.

27. Quantitative easing across the world, as well as low LIBOR is helpful to shipping.

28. In conclusion, a market recovery is expected to be a long drawdown affair with numerous technical rallies and falls, but expectations of a recovery in 2015/2016 appear quite probable. Shipfinance is still expected to turn around from 2016 onwards, as 2015 shall still be a year of adjustment.




What are the prospects for the world economy, international trade and shipping?

When is the recovery expected to come?

Is ship finance expected to recover?

How much of a problem are loans?

3. What is the current attitude to risk among top bankers? Top Bankers’ Survey

Bankers’ Survey

Results of a Top International Ship Finance Bankers’ survey,

conducted by Petrofin Research © November 2014


We posed, in October/November, 16 questions to 22 top ship finance bankers, who collectively hold about $219bn in shipping loan portfolios, or approx. 56% of top 40 international bank shipfinance totals ($391.45bn) or 46% of global shipfinance (approx 475bn).

The results are as follows:


Q1: Do you think that the DRY shipping freight market for 2015

Bankers’ responses

a. The same as now 50% b. Higher 18.18%

c. Lower 31.82% d. Much lower 0%


Responses - 2011

24.14%

0.00%

72.41%

3.45% 0.00%

20.00%

40.00%

60.00%

80.00%

a. Thesame as

now

b. Higher c. Lower d. Muchlower

1. Do you think that the DRY shipping freight markets for 2012 shall be:

60.71%

10.71%

28.57%

0.00% 0.00%

10.00%20.00%30.00%40.00%50.00%60.00%70.00%

a. Thesame as

now


Q1: Do you think that the DRY shipping freight markets for 2013 shall be

45.00% 55.00%

0.00% 0.00% 0.00%

10.00%20.00%30.00%40.00%50.00%60.00%

a. Thesame as

now

b.Higher

c. Lower d. Muchlower

Responses - 2012 Responses - 2013

Q1: Do you think that the DRY shipping freight market for 2014

50.00%

18.18%

31.82%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

a. The same as now b. Higher c. Lower d. Much lower

Q2: Do you think that the TANKERS shipping freight markets for 2014 shall be:


51.72%

24.14% 24.14%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

a. The sameas now

b. Higher c. Lower d. Muchhigher

2. Do you think that the TANKERS shipping freight markets for 2012 shall be:

39.29% 42.86%

17.86%

0.00% 0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%

a. The sameas now


Q2: Do you think that the TANKER shipping freight markets for 2013 shall be


65.00%

35.00%

0.00% 0.00% 0.00%

10.00%20.00%30.00%40.00%50.00%60.00%70.00%

a. The sameas now



a. The same as now 50% b. Higher 36.36% c. Lower 13.64% d. Much higher 0%

Responses - 2013

Q2: Do you think that the TANKERS shipping freight markets for 2015 shall be:

50.00%

36.36%

13.64%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

a. The same as now b. Higher c. Lower d. Much higher

Q3: Do you think that the CONTAINER shipping freight markets for 2015 shall be


27.59%

13.79%

58.62%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

a. The sameas now


3. Do you think that the CONTAINER shipping freight markets for 2012 shall be:

50.00%

21.43% 28.57%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

a. Thesame as

now




a. The same as now 59.09% b. Higher 22.73% c. Lower 18.18% d. Much lower 0%

45.00% 45.00%

10.00%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

a. The same asnow

b. Higher c. Lower d. Much lower


Responses - 2011 Responses - 2012 Responses - 2013

59.09%

22.73%

18.18%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%


Q4: Do you think that second hand vessel prices for dry bulk for 2015 shall be:


13.79% 0.00%

86.21%

0.00% 0.00%

20.00%40.00%60.00%80.00%

100.00%

a. Thesame as

now


4. Do you think that second hand vessel prices for Dry bulk for 2012 shall be:

28.57%

7.14%

64.29%

0.00% 0.00%

20.00%

40.00%

60.00%

80.00%

a. Thesame as

now


Q4: Do you think that second hand vessel prices for dry bulk for 2013 shall be


a. The same as now 22.73% b. Higher 18.18% c. Lower 59.09% d. Much lower 0%


20.00%

75.00%

5.00% 0.00% 0.00%

10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%

a. The sameas now


Responses - 2013

Q4: Do you think that second hand vessel prices for dry bulk for 2014 shall be:

22.73%

18.18%

59.09%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%


Q5: When do you believe that equilibrium between demand and supply will be reached in the dry bulk sector:


0.00%

50.00% 42.86%

7.14%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

a. In 2013 b. In 2014 c. In 2015 d. In 2016 andbeyond

Q5: When do you believe that equilibrium between demand and supply will be reached in the dry bulk sector?


a. In 2015 9.09% b. In 2016 40.91% c. In 2017 45.45% d. In 2018 and beyond 4.55%

Responses - 2012

5.00%

55.00%

20.00% 20.00%

0.00%10.00%20.00%30.00%40.00%50.00%60.00%


Responses - 2013

Q5: When do you believe that equilibrium between demand and supply will be reached in the dry bulk

sector:

9.09%

40.91%

45.45%

4.55%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%


Q6: Do you expect China's growth, currently running at about 7%, in 2015 to:


24.14%

3.45% 0.00%

72.41%

0.00% 0.00%

20.00%

40.00%

60.00%

80.00%

a. Staythe same

b. Riseto 10%

c. Riseover 10%

d. Dropto 6-8%

e. Dropbelow 6%

6. Do you expect China's growth currently at about 9.5%, in the next 12 months to:

42.86%

28.57%

3.57%

21.43%

3.57%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

a. Staythe same

b. Rise to8%

c. Riseabove 8%

d. Dropto 6%

e. Dropbelow 6%

Q6: Do you expect China’s growth, currently at about 7%, in the next 12 months to


a. Stay the same 54.55% b. Rise to 8% 0% c. Rise above 8% 0% d. Drop to 6% 45.45% e. Drop below 6% 0%

60.00%

10.00% 0.00%

30.00%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

a. Staythe same

b. Riseto 8%

c. Riseabove 8%

d. Dropto 6%

e. Dropbelow 6%

Responses - 2011 Responses - 2012 Responses – 2013

Q6: Do you expect China's growth, currently running at about 7.5%, in the next 12 months to:

54.55%

0.00% 0.00%

45.45%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

a. Stay thesame

b. Rise to 8% c. Rise above8%

d. Drop to 6% e. Drop below6%

Q7: Do you think that global economic growth over the period 2015-2016 will be:


34.48%

55.17%

10.34%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

a.Under 2%

b. 3-4% c.Between 4-

5%

d. Over5%

7. Do you think that global economic growth over the period 2012-2013 will be:

32.14%

67.86%

0.00% 0.00% 0.00%

20.00%

40.00%

60.00%

80.00%

a. Under2%

b. 3-4% c.Between 4-

5%

d. Over 5%

Q7: Do you think that global economic growth over the period 2013-2014 will be


Bankers’ responses a. Under 2% 27.27% b. 3-4% 72.73% c. Between 4-5% 0% d. Over 5% 0%

20.00%

80.00%

0.00% 0.00% 0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

a.Under 2%

b. 3-4% c.Between

4-5%

d. Over5%


Q7: Do you think that global economic growth over the period 2014-2015 will

be:

27.27%

72.73%

0.00% 0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

a. Under 2% b. 3-4% c. Between 4-5% d. Over 5%

Q8: Do you think that European ship finance activity will revive in:


0.00%

34.48% 41.38%

24.14%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

a. 2012 b. 2013 c. 2014 d. 2015and

beyond

8. Do you think that European ship finance activity will revive in:

0.00%

35.71% 32.14% 32.14%

0.00%

10.00%

20.00%

30.00%

40.00%

a. 2013 b. 2014 c. 2015 d. 2016 andbeyond

Q8: Do you think that European ship finance activity will revive in

Bankers’ responses a. 2015 45.45% b. 2016 27.27% c. 2017 22.73% d. 2018 and beyond 4.55%

15.00%

30.00% 35.00%

20.00%

0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%40.00%

a. 2014 b. 2015 c. 2016 d. 2017 andbeyond

Responses - 2012 Responses - 2011 Responses - 2013 Q8: Do you think that European ship finance activity will

revive in:

45.45%

27.27%

22.73%

4.55%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

a. 2015 b. 2016 c. 2017 d. 2018 and beyond

Q9: Do you expect the overall global ship finance loan portfolio (loans + commitments) in 2015 to:


0.00%

13.79% 20.69%

48.28%

17.24%

0.00%

20.00%

40.00%

60.00%

a.Increaseby over

10%

b.Increaseby up to

10%

c.Stay the

same

d.Reduce

up to10%

e.Reduceby over

10%

9. Do you expect the overall global ship finance loan portfolio

(loans+commitments) in 2012 to:

0.00% 0.00%

21.43%

57.14%

21.43%

0.00%

20.00%

40.00%

60.00%

a.Increaseby over

10%

b.Increaseby up to

10%

c.Stay the

same

d.Reduce

up to 10%

e.Reduceby over

10%

Q9: Do you expect the overall global ship finance loan portfolio (loans +

commitments) in 2013 to:


a. Increase by over 10% 9.09% b. Increase by up to 10% 31.82% c. Stay the same 45.45% d. Reduce up to 10% 9.09% e. Reduce by over 10% 4.55%

15.00%

5.00%

50.00%

30.00%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

a.Increase by

over 10%

b.Increase by

up to 10%

c.Stay the

same

d.Reduce up

to 10%

e.Reduce by

over 10%


9.09%

31.82%

45.45%

9.09%

4.55%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

a. Increase byover 10%

b. Increase byup to 10%

c. Stay thesame

d. Reduce upto 10%

e. Reduce byover 10%

Q10: For your own institution, do you expect your ship finance portfolio (loans + commitments) in 2015 to


10.34%

20.69%

37.93%

6.90%

20.69%

0.00%

10.00%

20.00%

30.00%

40.00%

a.Increase byover 10%

b.Increase byup to 10%

c. Staythe same

d.Reduce up

to 10%

e.Reduce bymore than

10%

10. For your own institution, do you expect your ship finance portfolio

(loans+commitments) in 12 months' time to:

14.29% 10.71% 21.43%

39.29%

14.29%

0.00%

20.00%

40.00%

60.00%

a.Increaseby over

10%

b.Increaseby up to

10%

c. Staythe same

d.Reduce

up to 10%

e.Reduceby morethan 10%

Q10: For your own institution, do you expect your ship finance portfolio (loans + commitments) in 12

months' time to:


a. Increase by over 10% 27.27% b. Increase by up to 10% 27.27% c. Stay the same 36.36% d. Reduce up to 10% 9.09% e. Reduce by more than 10% 0%

20.00% 15.00% 15.00%

50.00%

0.00% 0.00%

10.00%20.00%30.00%40.00%50.00%60.00%

a.Increaseby over

10%

b.Increaseby up to

10%

c.Stay the

same

d.Reduce

up to 10%

e.Reduceby morethan 10%

Responses - 2011 Responses - 2012 Responses - 2013 Q10: For your own institution, do you expect your ship

finance portfolio (loans + commitments) in 12 months' time to

27.27% 27.27%

36.36%

9.09%

0.00% 0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

a. Increase byover 10%

b. Increase byup to 10%

c. Stay thesame

d. Reduce upto 10%

e. Reduce bymore than 10%

Q11: Do you expect loan spreads for new shipping loans (currently about 250-400bps) over the next 12 months, to:


44.83% 55.17%

0.00% 0.00%

20.00%

40.00%

60.00%

a. Stay thesame

b. Rise c. Fall

11. Assuming for new shipping loans that loan spreads (currently about 300-750bps) over the next months, do you expect loan spreads to:

67.86%

32.14%

0.00% 0.00%

20.00%

40.00%

60.00%

80.00%

a. Stay thesame

b. Rise c. Fall

Q11: Do you expect that loan spreads (currently about 300-750bps) over the

next 12 months, to


a. Stay the same 59.09% b. Rise 0% c. Fall 40.91%

55.00%

10.00%

35.00%

0.00%10.00%20.00%30.00%40.00%50.00%60.00%

a. Staythe same

b. Rise c. Fall


Q11: Do you expect loan spreads for new shipping

loans (currently about 300-450bps) over the next 12 months, to:

59.09%

0.00%

40.91%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

a. Stay the same b. Rise c. Fall

Q12: Do you foresee for 2015 non-performing loans to


3.45%

82.76%

0.00% 13.79%

0.00%

50.00%

100.00%

a. Staythe same

b. Rise c. Fall d. Risesignificantly

12. Do you foresee for 2012 non-performing loans to:

3.57%

78.57%

0.00% 17.86%

0.00%

50.00%

100.00%

a. Staythe same


Q12: Do you foresee for 2013 non-performing loans to


a. Stay the same 40.91% b. Rise 40.91% c. Fall 18.18% d. Rise significantly 0%

55.00%

35.00%

5.00% 5.00%

0.00%10.00%20.00%30.00%40.00%50.00%60.00%

a. Staythe same as

now



Q12: Do you foresee for 2014 non-performing loans

40.91% 40.91%

18.18%

0.00% 0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

a. Stay the sameas now

b. Rise c. Fall d. Rise significantly

Q13: Do you foresee Far Eastern banks to develop over the next 3-5 years into:


10.34%

62.07%

27.59%

0.00%

20.00%

40.00%

60.00%

80.00%

a. Majorcompetition

b. Mediumcompetition

c. Minorcompetition

13. Do you foresee Far Eastern banks to develop over the next 3-5 years into:

7.14%

50.00% 42.86%

0.00%

20.00%

40.00%

60.00%

a. Majorcompetition


c. Minorcompetition

Q13: Do you foresee Far Eastern banks to develop over the next 3-5 years into


a. Major competition 9.09% b. Medium competition 68.18% c. Minor competition 22.73%

0.00%

60.00%

40.00%

0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%

a. Majorcompetition


c. Minorcompetition


Q13: Do you foresee Far Eastern banks to develop over the next 3-5 years into:

9.09%

68.18%

22.73%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

a. Major competition b. Medium competition c. Minor competition

Q14: Over the next 2-3 years, will ship finance from non-bank sources, i.e. private equity, stock markets, etc. play


25.00%

75.00%

0.00% 0.00%

20.00%

40.00%

60.00%

80.00%

a. Asimilar role

b. Higher c. Lower

Q14: Over the next 2-3 years, will ship finance from non-bank sources, i.e. private equity,

stock markets, etc. play

34.48%

55.17%

10.34%

0.00%

20.00%

40.00%

60.00%

a. Asimilar role

b. Higher c. Lower

14. Over the next 2-3 years, will ship finance from non-bank sources, i.e. private equity,

stock markets, etc. play


a. A similar role 72.73% b. Higher 0% c. Lower 27.27%

25.00%

75.00%

0.00% 0.00%

10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%

a. A similarrole

b. Higher c. Lower


Q14: Over the next 2-3 years, will ship finance from

non-bank sources, i.e. private equity, stock markets, etc. play

72.73%

0.00%

27.27%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

a. A similar role b. Higher c. Lower

Q15: Do you foresee the current shipping crisis (across all sectors) to last for a further:


10.71%

85.71%

0.00% 3.57%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

a. 1 year b. 2 years c. 3 years d. 4 years

15. Do you foresee the current shipping crisis (across all sectors) to last for a further

13.79%

62.07%

24.14%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%


14: . Do you foresee the current shipping crisis (across all sectors) to last for:

Bankers’ responses a. 1 year 22.73% b. 2 years 54.55% c. 3 years 22.73% d. 4 years 0%

40.00% 35.00%

20.00%

5.00%

0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%



Q15: Do you foresee the current shipping crisis (across all sectors) to last for a further:

22.73%

54.55%

22.73%

0.00% 0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%


Q16: In the light of massive investments in shipping over the last 2 years by US Equity Funds, do you consider that such funds’ investment returns in the next 3-5 years shall be:


Bankers’ responses a. Very satisfactory 0% b. Satisfactory 13.64% c. Breakeven 45.45% d. Negative 40.91% e. Disastrous 0%

Question 16 asked this year for the first time

0.00%

13.64%

45.45%

40.91%

0.00% 0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

a. Very satisfactory b. Satisfactory c. Breakeven d. Negative e. Disastrous

1. We divided the top 40 banks between banks with a reduced capacity, banks with lending capacity and banks with neutral/unclear policy.

2. We compared this year’s findings with those of Autumn 2010, November 2011, November 2012 and November 2013 to determine if the ship finance climate is improving, has remained static, or is worsening.

3. The results are shown in Graph 5, below:

4. What is the risk appetite for shipping finance by banks?


Global ship finance portfolios Autumn 2010, Top 40 banks: $466.76bn

November 2011, Top 40 banks: $461.196bn November 2012, Top 40 banks: $422.13bn

November 2013, Top 40 banks: $400.89bn November 2014, Top 40 banks: $391.45bn


November 2014 Graph 8

Banks with neutral/unclear policy/capacity

Banks with reduced capacity

Banks with lending capacity

16.10%

24.32% 23.72%

30.52%

33.92%

30.41%

46.10% 44.97%

30.32%

33.84%

53.49%

29.58% 31.31%

39.16%

32.24%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Autumn2010

Nov-11 Nov-12 Dec-13 Nov-14 Autumn2010

Nov-11 Nov-12 Dec-13 Nov-14 Autumn2010

Nov-11 Nov-12 Dec-13 Nov-14

5. Summary and conclusions

1. Global economic conditions are still fragile but international growth and demand/supply across many sectors is expected to improve in 2015-2016.

2. Prospects for a shipping market recovery over the next 2-3 years have increased.

3. Shipping risk appetite stabilising across the board.

4. Newbuilding orders and international trade growth remain the keys to a sustainable recovery.

5. Western banks due to own constraints still lagging behind but there is some optimism, as to their recovery in 2011-2016,especially among the North American banks.

6. Private equity is currently licking its wounds and is patiently awaiting market developments.

7. Keep your seat belts fastened, it will be a bumpy ride.

27th annual ship finance & investment forum 2014 london 5th – … · 2018. 4. 12. · an...

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