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Key Developments and Growth in Greek Ship-Finance June 2019

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Key Developments and Growth in Greek Ship-Finance June 2019 Key Developments and Growth in Greek Ship-Finance June 2019 By Ted Petropoulos, Head, Petrofin Research. Petrofin Bank Research© presents, for the 18th year running, an overview and an in-depth analysis of the bank loan portfolios to Greek shipping, as of 31st December 2018. Petrofin wish to thank all participating banks for their steadfast support, without which this research would not have been possible. The portfolios show both the shipping loans outstanding, as well as loans committed but undrawn. The committed but undrawn loans may be viewed as an indication of each bank’s ship lending momentum and / or the extent of its involvement in newbuilding finance. Contents 1. Main Findings p. 2 2. Petrofin Index of Greek ship finance p. 3 3. Total Greek shipfinance portfolio as of end 2018 p. 5 4. Research and Analysis A. The Greek shipfinance market as of end 2018 p. 7 B. Analysis of the 3 Bank Groups p. 15 C. Newbuilding finance research p. 27 D. The Greek Shipping Syndications market p. 28 5. The outlook for 2019 and beyond p. 29 1 Petrofin Bank Research© - www.petrofin.gr June 2019 1. Main findings Highlight points of this year’s results for Greek ship finance are as follows: Bank shipfinance for Greek shipping slowed down its contraction to a rate of -1.52% during 2018 from -5.62% in 2017 and -8.77% during 2016. The Petrofin Index for Greek Shipfinance, which commenced at 100 in 2001 and peaked at 443 in 2008, fell from 327 to 322. This is a smaller fall than last year. The overall Greek loans (both drawn and committed but undrawn) booked both in Greece and worldwide as of 31/12/2018 fell to $53,176.32 from $53,994.96 in 2017 and $57,211.35m in 2016. Specifically, Drawn loans are down by only -1.12% compared to -3.69% in 2017 and -5.34% the year before. Also, Commitments seem to have slowed down their downward trend and in 2018 they were down by -8.8% compared to a drop of -30.63% in 2017 and -38% in 2016. Greek banks continue the upward trend that started in 2017 and their portfolios are up by 8.03%. Eurobank is leading in terms of rate of growth with an increase of 20.73%. All banks show growth and this year we have added two more banks in the Groups, which are based in Cyprus. Traditionally, we have always included Cypriot Banks in the Greek group. Piraeus is up 3.27%, Alpha by 5.17%, NBG by 1.05%. Greek banks’ share of Greek ship finance has gone up to 18.47% from 16.84% in 2018, 15.25% in 2016 and 14.63% in 2015. This is a resilient performance by Greek banks despite continuing domestic problems and underlines the commitment of Greek banks to shipping. International banks WITH a Greek presence continued to reduce their exposure, in 2018 by -14.13%, compared to -10.52% in 2017, -6.5% in 2016, - 4.96% in 2015. HSBC and BNP Paribas are the only two which showed growth. The International Banks WITHOUT a Greek presence have risen for the first time since 2015, by 6.34%, compared to a -2% decline in 2017. The number of banks involved in Greek shipfinance has gone up to 52 from 51. RBS is not featured anymore and there are two new entries: Bank of Cyprus and Hellenic bank. Credit Suisse remains in the top position with an increased portfolio by almost 13%, overturning last year’s reduction of -4.17%. The top 10 Greek ship financing banks have reversed last year’s reduction and show a small increase of 1.14% and their share of the total Greek portfolio has gone up to 57.69% from 56.17% in 2017 and 55.19% in 2016. This is understandable, as these banks are those that are committed to shipping. European banks still account for the vast majority of total loans at 76.9%, down from 78.70% in 2017, 81.04% in 2016. For the year 2015, they held 81.23% of the total Greek portfolio, compared to 85.44% in 2014 and 90% the year before. The Lead Managers are up by 9.21%, turning round last year’s drop of -29.32%. Forward commitments, which by definition show the position of trust in the future of Greek shipping, continue their downward slide down to $2bn from $2.4bn last year and $3.55bn in 2016. Forward commitments to new buildings are down by -18.09% showing that there is less emphasis in newbuilding finance, compared to second hand vessel finance. 2 Petrofin Bank Research© - www.petrofin.gr June 2019 2. Petrofin Index of Greek ship finance The Petrofin Index for Greek ship finance published by Petrofin Research © is down to 322 from 327 last year. Graph 1: Petrofin Index 500 450 443 409 400 405 405 401 398 387 372 379 350 346 327 300 322 281 250 218 200 196 The growth150 shown by Far Eastern155 banks (Petrofin Bank Research – www.petrofin.gr) is not yet 129 fully offsetting the overall need of financing the Greek fleet. The Greek banks are feeling the brunt 100 100 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Petrofin Index of Greek ship finance Petrofin Bank Research© - as of end 2018, June 2019 The Petrofin Index of the Greek shipping portfolios since 2001 has fallen from a high of 443 in 2008 to 322, i.e. -27.3% over the last 11 years. This is in contrast to the rise of the Greek fleet from 222m tons DWT in 2008 to 412m tons DWT in 2018. 3 Petrofin Bank Research© - www.petrofin.gr June 2019 We also compared the Petrofin Index of Greek ship finance with the evolution of the Greek fleet DWT tonnage. Graph 2 500 500 Petrofin Index of Greek ship finance 450 450 443 405 405 409 400 401 398 400 387 379 372 350 346 350 327 322 300 300 281 273 250 256 250 240 218 217 200 196 201 200 186 170 175 155 157 160 150 147 150 138 129 128 122 117 110 113 100 100 100 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Greek fleet DWT Petrofin Index of Greek ship finance Petrofin Bank Research© - as of end 2018, June 2019 The Greek fleet continued its expansion and it stood at 412m DWT at the end of 2018 (Petrofin Research © - www.petrofin.gr). At the same time, Greek ship finance is still on a downward trend, although this trend is diminishing, as shown in end 2018 bank portfolios. 4 Petrofin Bank Research© - www.petrofin.gr June 2019 3. Total Greek shipfinance portfolio as of end 2018 Petrofin Bank Research © The annual results by Petrofin Bank Research ©, now released for the 18th year running, reflect the exposure of all banks engaged in lending to Greek owners, at the end of 2018. In Table 1 below, we cite the development of Greek ship finance over the last 18 years. Table 1: Greek shipfinance portfolios Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 28.66% 20.19% 26.61% 11.62% 28.45% 44.31% 9.39% -8.48% -1.17% 2.20% -2.83% -6.51% 4.10% -2.04% -8.77% -5.62% -1.52% Growth % Growth $16,525m $21,261m $25,554m $32,353m $36,112m $46,387m $66,941m $73,228m $67,020m $66,235 $67,694 $65,780 $61,498 $64,019.47 $62,712 $57,211 $53,995 $53,176.32 Totals in Usm in Totals Petrofin Bank Research © - June 2019 The downward trend is continuing as exposure to Greek shipping has dropped by a further -1.5%. However, this trend has been slowing down in the last 2 years and 2018 is marked by a more positive view of shipping finance by the remaining banks and the diminution of exposure by banks leaving the industry. 5 Petrofin Bank Research© - www.petrofin.gr June 2019 Graph 3: All banks ranked in terms of their Greek portfolios (in US$m): June 2019 Petrofin Bank Research © All banks financing Greek shipping – ranked portfolios in US$m Credit Suisse* $5,900.00 $1,100.00 $7,000.00 $3,099.00 DVB $3,052.00 $47.00 BNP Paribas $2,800.00 $120.00 $2,920.00 Piraeus Bank** $2,840.00 $2,840.00 $2,800.00 HSBC $2,800.00 Citi $2,500.00 $200.00 $2,700.00 National Bank of Greece $2,327.70 $125.40 $2,453.10 Alpha Bank $2,300.00 $40.00 $2,340.00 ABN AMRO $2,100.00 $225.00 $2,325.00 ING* $2,200.00 $2,200.00 Hamburg Commercial Bank* $1,700.00 $150.00 $1,850.00 Eurobank $1,737.00 $103.00 $1,840.00 CHINA EXIM* $1,800.00 $1,800.00 KEXIM* $1,400.00 $1,400.00 $1,379.33 DNB $1,274.20 $105.13 Nordea $1,153.91 $183.03 $1,336.94 KFW $650.25 $177.84 $828.09 $800.00 DB - Deutsche Shipping* $800.00 $760.00 Unicredit $760.00 Total number of banks lending to Greek shipping, as of end 2018: 52 $750.00 Nord LB $750.00 Total exposure to Greek shipping, as of end 2018: $53,176.32 $650.00 $650.00 China Everbright Bank* (Last year’s total: $53,994.96) Calyon* $600.00 Petrofin Bank Research© - June 2019 $600.00 China Development Bank* $450.00 $450.00 $350.00 CIT Maritime Finance* $350.00 $200.00 NIBC $200.00 $177.86 Aegean Baltic $163.62 $14.24 $157.00 Amsterdam Trade Bank $157.00 $150.00 Qatar National Bank* $150.00 $150.00 Barwa Bank* $150.00 $90.00 Bank of Cyprus $90.00 $80.00 Hellenic Bank* $80.00 $6,700.00 OTHER BANKS (21) $6,700.00 $0.00 $1,000.00 $2,000.00 $3,000.00 $4,000.00 $5,000.00 $6,000.00 $7,000.00 Drawn Portfolios Committed but Undrawn Portfolios Petrofin Bank Research© - as of end 2017, May 2018 * Market estimate **Excluding ferries Credit Suisse* stands at the top for the fifth year running with DVB in second place.
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