Every Step Means 10 Less Basis Points

The bank credit boom, which unfurled to the shipping market over the last 12 to 18 months, has now reached the point at which some veterans in the ship finance banking community are beginning to sound warning bells.

Almost without exception, banks around the world have extended their ship mortgage lending portfolios. From the strongly-capitalized Royal Bank of Scotland, which boasts the largest number of customers in the Greek market, to Greece’s own Euro Merchant Bank, which started lending to the shipping market only last summer, there is no shortage of eager bankers with loan agreements ready to sign.

Euro Merchant’s fledgling portfolio consists of just three deals for secondhand vessels totaling between $10-12 million. It’s small when compared to Deutsche Schiffsbank’s DM4 billion ($2.9 billion) loan portfolio or Citibank’s $3 billion shipping allocation, but expansion by many banks is expected to continue. “There is no shortage of business, and no problems in growing our book,” the Royal Bank of Scotland’s Lambros Varnavides commented recently.

This is only an excerpt of Every Step Means 10 Less Basis Points

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