Key Developments and Growth in Greek Ship-Finance

Transcription

1 Key Developments and Growth in Greek Ship-Finance By Ted Petropoulos, Head, Petrofin Research. Petrofin Bank Research presents, for the 15 th year running, an overview and an in-depth analysis of the bank loan portfolios to Greek shipping, as of 31 st December Petrofin wish to thank all participating banks for their on-going 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 ling momentum and / or the extent of its involvement in newbuilding finance. Contents 1. Main Findings p Total Greek shipfinance portfolio as of 2015 p Research and Analysis A. The Greek shipfinance market as of 2015 p. 5 B. Analysis of the 3 Bank Groups p. 12 C. Newbuilding finance research p. 27 D. The Greek Shipping Syndications market p The outlook for 2016 and beyond p. 29 1

2 1. Main findings The highlight points of this year s results for Greek ship finance are as follows: Greek ship finance shows a yoy decrease by 2.04%, resuming its contraction that began in The overall Greek loans (drawn and committed but undrawn) booked both in Greece and worldwide as of 31/12/ 2015 fell to $62,711.5m from $64.019bn. Specifically, Drawn loans are down by 3.25%. However, Commitments are up by 9.62%, the latter prompted by the high Greek purchase activity and high order book. All 5 Greek banks are down. National Bank of Greece is down by 9.99%, Aegean Baltic by 21.33%, Eurobank by 9.05%, Piraeus bank by 22.08% and Alpha bank by 13.22%. The overall Greek bank exposure is down by 15.22%. Greek banks share in Greek ship finance has fallen from 16.9% to 14.63%. International banks WITH a Greek presence continue to reduce their exposure, in 2015, by 7.94%, compared to a reduction of 4.23% in 2014, 9.35% in 2013 and 3.9% in International Banks WITHOUT a Greek presence, however, continue their rise, at a yoy rate of 11.26%, albeit at a more modest pace than last year s 17.23%. The number of banks involved in Greek shipfinance has risen again to 51, from 49 last year. RBS has, for the first time since our research began, lost its top position. The top 2 banks have reversed their position. Credit Suisse is now in the first position in Greek ship finance, raising their portfolio by 13.53% and second comes RBS with a fall of 13.58%. The top 10 Greek ship financing banks have again reduced their portfolios, collectively by 8.56%, compared to reduction of 4% last year. The market share of the top 10 is also reduced to 53.43% ($33.5bn), compared to a market share of 57.24% ($36.6bn) in 2014, 62.38% in 2013 ($38.3bn). Continuing the recent tr, the next 10 banks have increased their market share, this time by 7.22% ($18.23bn), compared to 3.05% last year ($17bn). As expected, the major banks exiting or reducing their shipping activities, i.e. RBS, Commerzbank, HSH, have continued their decline. European banks continue to account for the vast majority of total loans, although their share is steadily dropping. For the year 2015, they held 81.36% of the total Greek portfolio, compared 85.44% in 2014 and 90% the year before. The Lead Managers in syndicated loans are impressively up by 22.87%. Forward commitments to newbuldings have increased as a percentage of committed loans. 2

3 Total Greek Shipping Portfolio Growth % 2. Total Greek shipfinance portfolio as of 2015 Petrofin Bank Research The annual results by Petrofin Bank Research, now released for the 15th year running, reflect the exposure of all banks engaged in ling to Greek owners, at the of In Table 1 below, we cite the development of Greek ship finance over the last 15 years. Table 1 Dec 2001 Dec 2002 Dec 2003 Dec 2004 Dec 2005 Dec 2006 Dec 2007 Dec 2008 Dec 2009 Dec 2010 Dec 2011 Dec 2012 Decr 2013 Dec 2014 Dec % 20.19% 26.61% 11.62% 28.45% 44.31% 9.39% % -1.17% 2.20% -2.83% -6.51% 4.1% -2.04% $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, $62, Petrofin Bank Research - April shows a 2.04% decline, continuing a downward tr since 2009, that has only been interrupted twice. 3

4 Graph 1: All banks ranked in terms of their portfolios: Credit Suisse* Royal Bank of Scotland DVB Piraeus Bank ' National Bank of Greece DNB HSH Nordbank1 CHINA EXIM* BNP Paribas Citibank ABN AMRO ING Alpha Bank HSBC China Development Bank* Unicredit DB - Deutsche Shipping* Nordea Commerzbank** Eurobank KEXIM* KFW Calyon* China Everbright Bank* Nord LB Bremer Landesbank CIT Maritime Finance* Qatar National Bank* Barwa Bank* Aegean Baltic NIBC OTHER BANKS (20) $3,000 $2,515 $2,200 $2,156 $1,600 $1,927 $1,600 $2,047 $1,400 $2,100 $2,000 $1,250 $1,500 $1,800 $1,335 $1,500 $1,089 $700 $644 $800 $450 $552 $600 $500 $335 $335 $237 $200 $200 $53 $107 $450 $364 $367 $5,580 $5,200 $4,400 $600 $300 $293 $125 $141 $185 $114 $4,560 $142 Total number of banks ling to Greek shipping, as of 2015: 51 (Last year s total: 49) Total exposure to Greek shipping, as of 2015: $62, (Last year s total: $64,019.5) Petrofin Bank Research - $1,140 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 Drawn loans Committed but undrawn loans 1 * Market estimates ** Banks running off their portfolios Preliminary Figures Excluding ferries (Piraeus bank) Petrofin Bank Research - as of 2015, Note: for ranking total and performance, please refer to pages 8 and 9. Also, HSH is shown for its core bank only and these are its preliminary reported figures for the year Credit Suisse* is clearly the leading financing bank of Greek shipping, superceding the all time leader, RBS. An interesting picture emerges, whereby there is a steep rise in the bank s commitments by 84% ($1.14bn) showing that the bank ints to stay very close to Greek shipping in the future. We have already mentioned that, although European banks hold the largest market share, collectively they are gradually reducing their portion. On the other hand, Far Eastern banks are increasing their market share, on account of financing newbuilding orders. This year s yoy increase stands at 11.4% from 8.59% in 2014 and 6.02% in

5 3. Research and Analysis A. The Greek shipfinance market as of 2014 Graph 2: Bank exposure in terms of bank groups is as follows: Greek shipping bank portfolios since 2001 per bank group in $m Petrofin Bank Research $40,000 $38,984 $36,777 $35,882 $35,290 $35,000 $34,040 $33,914 $30,000 $30,537 $29,441 $27,104 $25,000 $20,000 $15,000 $10,000 $5,000 $0 $24,252 $26,435 $23,759 $20,231 $19,540 $19,161 $17,887 $15,840 $16,141 $15,884 $13,939 $14,517 $17,300 $14,469 $12,705 $14,788 $16,944 $10,125 $14,102 $10,487 $10,819 $12,070 $9,173 $8,185 $14,061 $7,050 $10,049 $8,604 $9,788 $7,347 $6,165 $5,642 $6,344 $6,523 $3,310 $4,472 Greek Banks International Banks WITHOUT a Greek presence Inernational Banks WITH a Greek presence International banks with a Greek presence continue to show a decline for the seventh year running. Greek banks have turned around last year s slight increase, and now their portfolios stand at below 2003 levels. International banks without a Greek presence show an increase for the seventh year in a row, by $2,676bn. In this sector, we have added two Maltese banks (IIG Bank and FIM Bank), as well as two Japanese ones (Sumitomo Mitsui Trust Banking and Mitsubish UFG). Overall, International banks with a Greek presence are barely in the lead and it is expected that they will soon be overtaken by banks with no Greek presence. It is self evident that maintaining a physical presence in Greece is no longer viewed as an advantage that would compensate for the additional cost and risk involved. 5

6 Average yearly growth since 2001 Portfolio growth between Dec 2001 and Dec 2014 In the table below (Table 2) we observe the overall growth evolution in Greek ship ling as a whole as well as for the three bank groups: Table 2: Overall Growth in Greek Ship ling (in US$m) Greek Shipping Portfolio Growth Percentage End 2015 End 2014 End 2013 End 2012 End 2011 End 2010 End 2015 End 2014 End 2013 End 2012 End 2011 End 2010 International Banks WITH a Greek presence $27,104 $29, $30,742.5 $33, $35, $35, % -4.23% -9.35% -3.90% -1.65% -2.43% 284% 10.1% International Banks WITHOUT a Greek presence $26,435 $23, $20,268 $19, $17, $14, % 17% 5.78% 7.13% 23.62% 2.60% 329% 10.96% Greek banks $9,173 $10, $10, $12, $14, $15, % 3.17% % % -8.60% -1.59% 177% 7.55% Total $62,711 $64, $61, $65, $67, $66, % 4.1% -6.51% -2.83% 2.20% -1.17% 279% 9.99% Petrofin Bank Research - as of 2015 for previous years please refer to past years stats at International banks with a Greek presence continued their decline. This was due in part to the re-evaluation of these banks towards Greek and Global shipping and in part to their changing views about maintaining a Greek presence. International banks without a Greek presence have continued to grow and consist of banks with a particular positive view of shipping. Greek banks, still operating under the uncertainty of the Greek crisis, show a decline after last year s positive effort to maintain their market share. 6

7 Greek banks International Banks WITHOUT a Greek presence International Banks WITH a Greek presence % of change in Drawn Loan portfolio % of change in Committed but Undrawn Loan portfolio Table 3: Growth in Drawn portfolios and Committed and Undrawn portfolios (in US$m) Drawn loan portfolios Committed but Undrawn loan portfolios End 2015 End 2014 End 2013 End 2012 End 2011 End 2010 End 2015 End 2014 End 2013 End 2012 End 2011 End : -6.43% 2015: 25.16% 2014: -4.91% 2014: 4.2% $25,329 $27, $28,467 $31, : -8.64% $31, $31, $1774,58 $2, $2,276 $2, $3, :-17.37% $4, : -1.45% 2012: -25% 2011: -0.31% 2011: -12% 2015: 6.28% 2015: 43.18% 2014: 16.61% 2014: 21.3% $21, $20, $17,623 $16, $15, $11, : -8.64% $4, $3, $2,645 $2, $2, $2, : 0.76% 2012: -1.45% 2012: 2.86% 2011: -0.31% 2011:-9.52% 2015: % 2015: % 2014: 0.66% 2014:149.22% $8,941 $10, $10, $12, $13, $13, :-16.3% $232 $441.5 $ $ $ $ :-54.1% 2012: -0.6% 2012:-56.7% 2011: -0.7% 2011:-58.8% 2015: -3.25% 2015: 9.62% 2014: 2.83% 2014:18.11 % Total $56,111 $57, $56, $60, $60, $57, :-6.02% $6, $6, $5, $5, $7, $9, :-11.58% 2012: -0.93% 2012: -19% 2011: :-22.3% Petrofin Bank Research - as of 2015 for previous years please refer to past years stats at It is interesting to observe that although the overall portfolio is down and although the overall drawn loans are down, commitments are up by 9.62%. This stems from only one sector, that of the banks based outside of Greece, whose commitments are up by 43.18%. 7

8 Table 4: Bank ranking Greek shipping portfolios as of 2015 Rank Bank Drawn Committed but Undrawn Total 1 Credit Suisse* $5,580 $1,140 $6,720 2 Royal Bank of Scotland $5,200 $0 $5,200 3 DVB $4,400 $142 $4,542 4 Piraeus Bank $3,000 $0 $3,000 5 National Bank of Greece $2,515 $125 $2,640 6 DNB $2,200 $141 $2,341 7 HSH Nordbank 1 $2,156 $185 $2,341 8 CHINA EXIM* $1,600 $700 $2,300 9 BNP Paribas $1,927 $293 $2, Citibank $1,600 $600 $2, ABN AMRO $2,047 $114 $2, ING $1,400 $720 $2, Alpha Bank $2,100 $0 $2, HSBC $2,000 $0 $2, China Development Bank* $1,250 $600 $1, Unicredit $1,500 $300 $1, DB - Deutsche Shipping* $1,800 $0 $1, Nordea $1,335 $367 $1, Commerzbank** $1,500 $0 $1, Eurobank $1,089 $107 $1, KEXIM* $700 $450 $1, KFW $644 $364 $1, Calyon* $800 $0 $ China Everbright Bank* $450 $200 $ Nord LB $552 $53 $ Bremer Landesbank $600 $0 $ CIT Maritime Finance* $500 $0 $ Qatar National Bank* $335 $0 $ Barwa Bank* $335 $0 $ Aegean Baltic $237 $0 $ NIBC $200 $0 $200 OTHER BANKS (20) $4,560 $4,560 Overall number of banks 51 Total Greek portfolio $62,711.5 Market estimates ** Exiting ship finance 1 Preliminary Figures Excluding ferries Petrofin Bank Research - 8

9 The top 10 banks ranking order follows in Table 5. Table 5: Top ten banks ranked by portfolio size (in US$m) last 4 years As of 2015 As of 2014 As of 2013 As of 2012 Rank Bank Total exposure in $m Market share % of Greek portfolio Bank Market Total share % exposure of Greek in $m portfolio Bank Total exposure in $m Market share % of Greek portfolio Market share % of Greek portfolio Total exposure in $m Market share % of Greek portfolio 1 Credit Suisse* $6, % Royal Bank of Scotland $7, % Royal Bank of Scotland $8, % Royal Bank of Scotland $10, % 2 Royal Bank of Scotland $5, % Credit Suisse* $5, % Credit Suisse* $5, % Credit Suisse* $5, % 3 DVB $4, % DVB $4, % Commerzbank** $4, % Commerzbank*** $5, % 4 Piraeus $3, % Piraeus Bank $3, % Piraeus Bank* $3, % DVB $2, % Bank 5 National Bank of Greece $2, % National Bank of Greece $2, % DVB $3, % DNB $2, % 6 DNB $2, % HSH Nordbank $2, % National Bank of Greece $2, % Emporiki* $2, % 7 HSH Nordbank 1 $2, % Commerzbank** $2, % DNB $2, % National Bank of Greece $2, % 8 CHINA EXIM* $2, % Alpha Bank $2, % Alpha Bank $2, % HSH Nordbank** $2, % 9 BNP Paribas $2, % DNB $2, % HSH Nordbank $2, % Marfin Egnatia $2, % 10 Citibank $2, % DB - Deutsche Shipping* $2, % DB-Deutsche Shipping* $2, % HSBC $2, % ING 3.04% Totals $36, % Totals $38, % Totals $39, % Petrofin Bank Research - *Market estimate 1 Preliminary Figures Excluding ferries For the first time we note a Chinese bank in the top 10 banks, China Exim*. Credit Suisse* has increased its share and RBS has markedly reduced it. Also, BNP Paribas and Citibank have joined the top 10 banks. Commerzbank**, Alpha bank and Deutsche are not featured in the top 10 list for

10 Nationality of banks Table 6: Distribution of banks engaged in Greek Ship-finance by nationality: Nationality UK & Ireland France / Belgium Scandinavian Germany Holland Greece Other European European Total North America Far East Middle East 2 2 Australia World Total Total Portfolios per Geographical region Percentage of total of Greek ship finance 2015: $7, : 11.5% 2014: $9, : 15.52% 2013: $11, : 17.93% 2012: $13, : 20.65% 2015: $3, : 5.02% 2014: $3, : 4.69% 2013: $3, : 4.98% 2012: $3, : 5.8% 2015: $5, : 8.44% 2014: $5, : 8.25% 2013: $4, : 7.6% 2012: $5, : 7.65% 2015: $14, : 22.91% 2014: $15, : 26.69% 2013: $16, : 27% 2012: $17, : 25.8% 2015: $4, : 7.14% 2014: $3, : 5.6% 2013: $3, : 5.68% 2012: $2, : 4.26% 2015: $9, : 14.63% 2014: $10, : 16.9% 2013: $10, : 17.05% 2012: $12, : 19.31% 2015: $7, : 11.59% 2014: $6, : 9.79% 2013: $6, : 9.89% 2012: $5, : 8.5% 2015: 50, : 81.23% 2014: $54, : 85.44% 2013: $55, : 90.12% 2012: $60, : 91.97% 2015: $3, : 5.82% 2014: $2, : 4.37% 2013: $1, : 3.17% 2012: $1, : 2.71% 2015: 7, : 11.4% 2014: $5, : 8.59% 2013: $3, : 6.02% 2012: $3, : 4.56% 2015: $ : 1.07% 2014:$ : 1.05% 2015: : 0.48% 2014:$ : 0.55% 2013: $ : 0.65% 2012: $ : 0.76% 2015: $62, : $64, : $61, : $65,780 The Far East has gone up by 11.4%, whereas Germany, the main financier of Greek shipping is down to 23% from 27%. 10

11 1992 (52 banks) 1995 (67 banks) 1997 (77 banks) 2001 (40 banks) 2002 (51 banks) 2003 (54 banks) 2004 (50 banks) 2005 (40 banks) 2006 (39 banks) 2007 (41 banks) 2008 (40 banks) 2009 (41 banks) 2010 (39 banks) 2011 (55 banks) 2012 (51 banks) 2013 (46 banks) 2014 (49 banks) 2015 (51 banks) The evolution of the number of banks financing Greek shipping in the last 23 years is as follows: Graph 3 Number of banks financing Greek Shipping Petrofin Bank Research Greek banks International Banks WITH a Greek presence International Banks WITHTOUT a Greek presence 11

12 B. Analysis of the 3 bank groups International Banks WITH a Greek Presence This bank group is almost equally divided between those who reduce their commitment to Greek shipping and those who take it further. Graph 4 Petrofin Bank Research - Royal Bank of Scotland DVB International Banks WITH a Greek presence Total Greek Portfolio: $27,104, Number of Banks: 11 Total Greek Portfolio: $29,440.87m, Number of Banks: 11 in US$m $4,400 $5,200 $142 Totals $5,200 $4,542 DNB $2,200 $141 $2,341 HSH Nordbank 1 $2,156 $185 $2,340.7 BNP Paribas $1,927 $293 $2,220 Citibank $1,600 $600 $2,200 ABN AMRO $2,047 $114 $1,160 HSBC $2,000 $2,000 Unicredit $1,500 $300 $1,800 Commerzbank** $1,500 $1,500 Calyon* $800 $800 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 Drawn loans Committed but Undrawn * Market estimate ** Leaving shipping 1 Preliminary Figures These international banks with a presence in Greece had always held the highest exposure to Greek shipping. As a result of the overall European economic crisis, quite a few of them, especially the largest ones, are shrinking their exposure to Greek shipping and their overall decline is measured at 7.94%. In Tables 7, 8 and 9 below we note the differences between Total portfolios, Drawn loans and Committed but Undrawn loans over a period of 7 years for the Banks WITH a Greek presence: 12

13 Table 7: International Banks with a Greek presence Total Greek portfolios 2015 International Banks WITH a Greek presence - Total Greek portfolios (in US$m) Change between 2014 and 2015 Royal Bank of $5, $7, $8,813 $10,555 $11,455 $12,439 $13,302 $13, % Scotland HSH Nordbank 1 $2, $2, $2,355 $2,297 $2,220 $3,122 $5,202 $5, % Commerzbank** $1, $2, $4,000 $5,200 $5,606 $5,556 $4,969 $5, % Calyon* $ $ $1,100 $1,400 $1,550 $2,000 $2,000 $2,750 0% Unicredit $1, $1, $1,755 $1,860 $2,040 $1,885 $1,951 $2, % DVB $4, $4, $3,700 $2,949 $2,831 $2,174 $1,470 $1,850 0% ABN AMRO $2, $1, $1,693 $1,450 $1,132 $346 $251 $ % HSBC $2, $2, $1,750 $2,000 $2,400 $2,300 $1,650 $1,343 0% BNP Paribas $2, $1, $1,600 $1,948 $2,101 $2,244 $1,249 $1, % Citibank $2, $1, $1,400 $1,500 $1,108 $940 $940 $1, % DNB $2, $2, $2,576 $2,754 $2,850 $2,877 $2,544 $3, % Total $27,104 $29,441 $30,742.5 $33, $35, $35, $36, $38, % *Market Estimate ** Exiting ship finance 1 Preliminary figures Petrofin Bank Research - Within this Group, we note significant changes in policy among these banks. Citibank, BNP Paribas and Unicredit are showing a commitment to Greek shipping, whereas the until recently traditionally largest financiers are winding down their portfolios at a fast rate. 13

14 Table 8: International banks WITH a Greek presence Drawn loans International Banks WITH a Greek presence - Drawn Loans (in US$m) Bank Change between 2014 and 2015 Royal Bank of Scotland $5,200 $7,600 $8,600 $10,170 $10,620 $11,288 $11,279 $10, % HSH Nordbank 1 $2,156 $2,171 $1,993 $2,087 $2, $2, $4, $4, % Commerzbank** $1,500 $2,500 $4,000 $5,200 $5, $5, $4, $4, % Calyon* $800 $800 $1,000 $1,200 $1, $1, $1, $1, % Unicredit $1,500 $1,480 $1,680 $1,836 $1, $1, $1, $1, % DVB $4,400 $4,200 $3,200 $2,700 $2, $2, $1, $1, % ABN AMRO $2,047 $1,725 $1,462 $1,100 $ $ $ $ % HSBC $2,000 $2,000 $1,750 $2,000 $2, $1, $1, $1, % BNP Paribas $1,927 $1,644 $1,600 $1,920 $2, $1, $ $ % Citibank $1,600 $1,100 $1,100 $1,000 $ $ $ $1, % DNB $2,200 $1,850 $2,082 $1,947 $2, $2, $2, $2, % Total $25,329 $27,070 $28,467 $31,160 $31,620 $31,718 $30,861 $29, % *Market Estimate ** Exiting ship finance 1 Preliminary figures Petrofin Bank Research - Citibank s 45.45% growth is noted, followed by ABN Amro, DVB and BnP Paribas. 14

15 Table 9: International Banks WITH a Greek presence Committed but Undrawn loans International bank WITH a Greek presence - Committed but Undrawn loans (in US$m) Royal Bank of Scotland 0 0 $213 $385 $ $1, $2, $3, Change between 2014 and 2015 HSH Nordbank $362 $210 $40.00 $ $ $1, % Commerzbank** 0 0 $0 $0 $ $ $ $1, Calyon* 0 0 $100 $200 $ $ $ $1, Unicredit $75 $24 $ $ $ $ % DVB $500 $249 $ $94.00 $ $ % ABN AMRO $231 $350 $ $41.54 $ $ % HSBC 0 0 $0 $0 $ $ $ $ BNP Paribas $0 $28 $86.00 $ $ $ % Citibank $300 $500 $ $ $65.00 $ % DNB $494 $807 $ $ $ $ % Total $2,276 $2,754 $3,670 $4,164 $5,916 $9, % *Market Estimate ** Exiting ship finance Petrofin Bank Research - 1 Preliminary figures In terms of committed but undrawn loans, Unicredit has been the most active banks in the last year. ABN and DNB have significantly reduced their commitments indicating a slowdown in ling appetite. 15

16 International Banks with a Greek Presence In Table 10, below, we present the evolutionary growth (or decline) of the Greek shipping portfolio of this Group. Table 10: Growth rates Annual % growth of Bank portfolios Banks Royal Bank of Scotland % % % -7.88% -7.91% -6.49% -4.85% HSH Nordbank -8.84% 9.03% 2.50% 3.61% % % -8.26% Citibank 37.5% 14.29% -6.67% 35% 17.87% 0% % Calyon* 0% % % -10% % 0% % HSBC 0% 14.29% % % 4.35% 39.39% 22.86% DVB -0.11% 23% 25.47% 4.17% 30.22% 47.89% % Unicredit 14.43% % -5.65% -8.80% 8.23% -3.41% BNP Paribas 13.55% 22.19% % -7.27% -6.37% 79.66% 0.82% Commerzbank** 0% % % -7.42% 0.90% 11.81% % DNB 1.34% % -6.46% -3.37% -0.94% 13.09% % ABN AMRO 8.67% 17.42% 16.76% 28.07% % 37.69% 6.22% Annual Group Growth * Market estimates ** Exiting ship finance -7.94% -4.23% -9.35% -3.9% -1.65% -2.4% -5.66% ABN is slowing down, as well as DVB. 16

17 International Banks WITHOUT a Greek Presence The overall portfolio of this group is up and is the only portfolio that has gone up in Graph 5 Credit Suisse* $5,580 $1,140 CHINA EXIM* ING China Development Bank* DB - Deutsche Shipping* Nordea $1,600 $1,400 $1,250 $1,800 $1,335 $700 $720 $600 $0 KEXIM* KFW China Everbright Bank* Nord LB Bremer Landesbank CIT Maritime Finance* Qatar National Bank* Barwa Bank* NIBC $700 $644 $450 $552 $600 $0 $500 $335 $335 $200 $450 $364 $200 $53 OTHER BANKS (20) $4, ,000 2,000 3,000 4,000 5,000 6,000 7,000 Drawn loans Committed but Undrawn loans This Group is increasing its overall portfolio, especially the Far Eastern banks. 17

18 The banks that have been included in this year s research, as a collective entry, are the following: Japan Bank for International Co-operation* Nippon Export and Investment Insurance* Danish Ship Finance* Danske* Fokus* KBC Bank* SEB* ITF* Scotia Bank* Banque Lblux* Bank of America* Commonwealth Bank of Australia* Berenberg* Dexia Bank Belgium* IIG Bank Malta* FIMbank Malta* Sumitomo Mitsui Trust Banking* Mitsubish UFG* Bank of Ireland *Market estimates Deka* Total portfolio: $4,560m The involvement of Far Eastern banks is increasing, as more Far Eastern banks are financing Greek owners to place or complete orders at Far Eastern shipyards. 18

19 Table 11: International Banks WITHOUT a Greek presence Total Greek portfolios International banks WITHOUT a Greek presence Total Greek portfolios (in US$m) Change Bank Credit Suisse* DB - Deutsche Shipping* Change between 2014 and $5, $5, $5, $4, $4, $4, % $2, $2, $2, $2, $1, $1, % Nordea $1, $1, $1, $1, $ $1, % Bremer Landesbank $ $ $ $ $ $ % Nord LB $ $ $ $ $ $ % CHINA EXIM* $1, $1, $ $ $ $ % KFW $ $ $ $ $ $ % ING $1, $1, $1, $ $ $ % KEXIM* $ $ $ $ $ $ % China Everbright Bank* $ $ $ $0.00 $0.00 $ % NIBC $ $ % China Development Bank* CIT Maritime Finance* Qatar National Bank* $1, $ $ % % % Barwa Bank* % OTHER BANKS (20) $2, $2, $2, % Total $26, $23, $19, $18,011 $16,237 $14,469 $14,102 $17, % * Market estimates Includes banks not active anymore Petrofin Bank Research - 19

20 Table 12: International banks WITHOUT a Greek presence Drawn loans International banks WITHOUT a Greek presence DRAWN LOANS (in US$m) Change between 2014 and 2015 Credit Suisse* $5, $5300 $4, $4, $4,000 $3,500 $3,000 $3, % DB - Deutsche Shipping* $1, $2000 $2, $2, $2,100 $2,439 $1,122 $ % Nordea $1, $1160 $ $ $800 $1,050 $800 $ % Bremer Landesbank $ $ $ $ $611 $449 $468 $ % Nord LB $ $615 $ $ $573 $525 $580 $ % CHINA EXIM* $1, $1400 $1, $ $600 $500 $150 14% KFW $ $616.5 $ $ $350 $ $350 $ % ING $1, $1350 $1, $1, $1,000 $402 $180 $ % KEXIM* $ $600 $ $ $300 $200 $150 17% China Everbright $ $350 $ $ $100 29% Bank* NIBC $ $162.5 $ $ % China Development $1250 $1100 $ $ $ % Bank* CIT Maritime Bank* $500 $ % Qatar National Bank* $335 $ % Barwa* $335 $ % Other banks $4475 $3600 $2, $2, $2, % Total $21, $20,151 $17,073 $15,386 $15,334 $11,650 $10,516 $11, % * Market estimates Includes banks not active anymore Petrofin Bank Research - 20

21 Table 13: International Banks WITHOUT a Greek presence Committed but Undrawn loans International banks WITHOUT a Greek presence - Committed but Undrawn Loans (in USm) Bank Credit Suisse* DB - Deutsche Shipping* Change between 2014 and 2015 $1,140 $619 $900 $903 $1,000 $1,000 $1,000 $1, % $ $ $ $ Nordea $367 $460 $260 $410 $ $ $ $ % Bremer Landesbank $0 $36 $41 $28 $69.00 $ $ $ % Nord LB $53 $40 $97 0 $20.00 $ $94.00 $ % CHINA EXIM* $700 $600 $450 $350 $ $ $94.00 $ % KFW $364 $316 $148 $244 $50.00 $ $ $ % ING $ $ $17.00 $ KEXIM* $450 $400 $300 $250 $ $ $ % China Everbright Bank* China Development Bank* $200 $150 $100 $100 $ % $600 $500 $300 $250 $ % NIBC 0 $88 $50 0 CIT Maritime Finance* 0 0 0% Qatar National Bank* 0 0 0% Barwa Bank* 0 0 0% Total $4,594 $3,208 $2,645 $2,625 $2,552 $2,820 $3,585 $5, % * Market estimates Includes banks not active anymore Petrofin Bank Research - 21

22 International Banks without a Greek Presence Table 14: International banks without a Greek presence Growth rates Annual % growth of Bank portfolios Banks Credit Suisse* 13.53% 3.84% 9.38% 4.22% 11.11% 12.50% % KFW 8.1% 3.66% -0.63% % % -7.08% 1.09% Bremer Landesbank % % 1.65% 19.79% % -5.77% 13.49% Nordea 5.06% 52.83% -8.62% 10.48% % 50% % Nord LB -7.63% -23.4% 6.24% 35.76% % 1.94% 0% ING 57.04% -10% 25.00% 0.00% % % % DB Shipping* -10% 0% 0.00% % % 80.33% -9.10% China Everbright Bank* 30% 42.86% 16.67% 66.67% - CHINA Exim* 15% 37.93% 20.83% 17.65% 30.77% 30% KEXIM* 15% 42.86% 16.67% % 25% 0% China Development Bank* 15.63% 60% 25.00% 30.00% - NIBC -20% % % recently rejoined Greek shipping lers after many years - CIT Maritime Finance 25% n/a - Qatar National Bank 0% n/a - Barwa Bank 0% n/a - OTHER BANKS 26.67% 24.78% 8.86% -2.03% - * Market estimates Annual Group Growth including other banks 11.26% 17.23% 5.78% 7.13% 23.62% 2.60% -18.5% 22

23 Greek Banks As the situation in the country is continuing its decline and prospects for a recovery are not yet showing clearly, Greek banks, which up to now had resisted the full impact of a chronic recession, are now showing a distinct tr of radically reshaping their ling policy to Greek shipping, at least for the time being. Graph 6 Greek Banks Total portfolio: $9,172.92m, Number of Banks: 5 Last year: $10,819m, Number of banks: 5 in US$m Totals Piraeus Bank ' 3,000 $3,000 National Bank of Greece 2, $,2640 Alpha Bank 2,100 $2,100 Eurobank 1, $1,196 Aegean Baltic 237 $ 237 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 Drawn Portfolios Committed but Undrawn Portfolios Petrofin Bank Research Excluding ferries (Piraeus bank) Piraeus bank is still the market leader, but its exposure (excluding ferries) has declined by 22% on account of bank sales, provisions, etc. NBG has halved its commitments and has reduced its exposure. 23

24 Table 15: Total Greek bank portfolios Greek Banks - Total portfolios (in US$m) Change between 2014 and 2015 Piraeus $3,000 $3,850 $3,900 $1,860 $1,950 $2,000 $1,810 $2, % Bank National $2,640 $2,933 $2,733 $2,389 $2,566 $3,004 $3,217 $3, % Bank of Greece Alpha $2,100 $2,420 $2,435 $1,715 $2,050 $2,470 $2,675 $2, % Bank Eurobank $1,196 $1,315 $1,150 $1,054 $1,266 $1,410 $1,373 $1, % Aegean $237 $301 $269 $308 $362 $327 $339 $ % Baltic Total $9, $10, $10, $14,517 $15,833 $16,140 $16, % Excluding ferries Includes portfolios of banks not active anymore Petrofin Bank Research - All banks are on a downward curve. Last year s more tempered ups and downs have given place to a very marked decline in Greek bank involvement in Greek ship finance. Table 16: Greek banks Drawn loans Greek Banks - Drawn Loans (in US$m) Change between 2014 and 2015 Piraeus Bank $3,000 $3,850 $3,900 $1,850 $1,900 $1,870 $1,700 $1, % National Bank of $2,515 $2,652 $2,592 $2,232 $2,432 $2,545 $2,374 $2, % Greece Alpha Bank $2,100 $2,420 $2,400 $1,700 $1,950 $2,120 $2,275 $2,100-13% Eurobank $1,089 $1,160 $1,150 $1,054 $1,188 $1,211 $1,181 $1, % Aegean Baltic $237 $296 $268 $304 $326 $291 $308 $ % Total $8,941 $10,378 $10,309.8 $12,318 $13,624 $13,715 $13,229 $12, % Excluding ferries Includes portfolios of banks not active anymore Petrofin Bank Research - 24

25 Greek Banks Table 17: Greek Banks Committed but Undrawn loans 2015 Greek Banks - Committed but Undrawn loans (in US$m) Change between 2014 and 2015 National $125.0 $281.0 $141.0 $157 $134 $459 $843 $1, % Bank of Greece Eurobank $107.0 $155.0 $0.0 $0 $78 $199 $192 $ % Alpha $0.0 $0.0 $35.0 $15 $100 $350 $400 $550 Bank Piraeus $0.0 $0.0 $0.0 $10 $50 $130 $110 $118 Bank Aegean $0.0 $5.5 $1.2 $4 $36 $36 $31 $51 Baltic Total $ $ $ $ $ $2, $2, $4, % Excluding ferries Includes portfolios of banks not active anymore Petrofin Bank Research - Arranged by level of commitments, NBG is still at the top, with a reducing forward portfolio, showing the influence of the Greek crisis. Table 18: Greek banks - Growth rates Annual % growth of Bank portfolios Excluding ferries Banks National Bank of -9.99% 7.32% 14.40% -6.90% % -6.62% -9.26% Greece Alpha Bank % -0.62% 41.98% -16% -17% -7.66% 0.94% Piraeus Bank % % -4.62% -2.50% 10.50% % Eurobank -9.05% 14.35% 9.07% % % 2.64% 5.76% Aegean Baltic % 11.99% % % 10.85% -3.67% 4.76% Annual Group Growth % 3.17% % % -8.60% -1.59% -4.74% 25

26 Table 19 summarises in one table the comparative statistics for the Greek ship-finance market over the last 15 years. Banks WITH a Greek presence Banks WITHOUT a Greek presence Number of banks Greek Shipping loan volumes in $bn $7.05 $8.19 $10.12 $13.94 $19.45 $24.25 $37.04 $38.98 $36.78 $35.88 $35.29 $33.90 $30.74 $29.44 $ $6.17 $8.60 $9.79 $12.07 $10.05 $14.79 $14.06 $17.30 $14.10 $14.47 $17.89 $19.16 $20.27 $23.76 $26.44 Greek banks $3.31 $4.47 $5.64 $6.34 $6.52 $7.35 $15.84 $16.94 $16.14 $15.88 $14.52 $12.70 $10.49 $10.82 $9.17 Totals $16.53 $21.26 $25.55 $32.35 $36.11 $46.39 $66.94 $73.23 $67.02 $66.24 $67.69 $65.76 $61.50 $64.02 $62.71 Petrofin Bank Research

27 Bank Credit Suisse* National Bank of Greece C. Newbuilding finance research - Forward commitments to newbuildings are up as a figure, as well as percentage of commitments. Table 20 Committed but Undrawn portfolio (in $m) % for N/Bs Amount for N/Bs Committed but Undrawn portfolio (in $m) % for N/Bs Amount for N/Bs Committed but Undrawn portfolio (in $m) % for N/Bs Amount for N/Bs Committed but Undrawn portfolio (in $m) % of N/Bs Amopunt for N/Bs Change in % allocation to New buildings since last year % % % 630-1% % % % % 93 29% HSH 1 Nordbank 210 1% % % % 0 0% BNP Paribas % 28 * * * % % 293 0% Bremer Landesbank 28 17% % % 0 0 Unicredit % % % % 300 0% DNB % % % % 47-47% EFG Eurobank % 0 0 0% 0 0% DVB % % % % 142 0% ABN AMRO % % % 86-8% Nordea % % % % % NIBC 88 35% 31 0 Citibank % % % % % Aegean Baltic 4 42% % 1 6 9% 0 0 Nord LB 90 98% % % % 33 32% ING % 648 Totals % % % % % * Market estimates 1 Preliminary figures The National Bank of Greece has allocated a larger percentage of its decreasing commitments to newbuildings compared to 2014 (up by 29%), whereas HSH, Unicredit, ABN and Aegean Baltic appear more supportive of second hand purchases (their allocated percentage to newbuildings are down). Unicredit, BNP Paribas, DVB and Nordea allocate their full commitments to newbuildings and the rest of the banks fluctuate mildly. Overall, this activity is dicated by bank policy towards newbuildings finance in today s markets. 27

28 D. The Greek shipping Syndications Market Nordea is the bank that has almost trippled its exposure through syndications. Citibank has also increased its syndicated exposure by 40% and DNB by 35%. The National Bank of Greece, Aegean Baltic and Alpha banks are down. Unicredit has limited its syndicated exposure by 56% and BNP Paribas by 18.9%. Table 21 No of banks Bank Change in the last year 1 Citibank $2,390 $300 $2,000 $2,000 $2,500 $3, % 2 Nordea $2,100 $1,100 $2,500 $1,510 $510 $1, % 3 Aegean Baltic $1,497 $1,399 $1,346 $1,291 $1,270 $1, % 4 HSH Nordbank $469 $822 $623 $673 $504 $ % 5 DNB $1,352 $2,085 $2,487 $2,479 $2,000 $2, % 6 Unicredit $281 $246 $227 $210 $341 $ % 7 National Bank of Greece $490 $447 $427 $451 $360 $ % 8 ABN AMRO $123 $278 n/a $121 $1,299 $1, % 9 Alpha Bank $39 $35 $30 $25 $64 $ % 10 BNP Paribas $255 $473 $665 $580 $545 $ % 11 KFW $45 n/a $402 $312 $311 $ % Totals $12, $10, $11, $9, $9, $11, % These porftfolios include more banks not featured anymore 28

29 29 4. The outlook for 2016 and beyond The extreme falls, in the preceding period, of the drybulk, offshore and container sectorsseverely tested both owners and banks. For banks, it was a traumatic experience, as numerous clients experienced negative cash flows and were forced to consider scrapping or lay up. Loan payments were often delayed and / or stopped altogether, whilst falling asset values created enormous security shortfalls in the banks loan portfolios. The number of loan defaults accelerated, loan loss provisions magnified and banks were forced to take difficult decisions. Understandably, individual banks acted differently and took into account individual client positions and ability to survive the crisis. A number of banks abandoned the conciliatory approach of restructures and called it a day by forcing owners to immediately sell vessels. Their justification was that by allowing for further delays via restructures, the eventual problem would magnify and their losses would rise too. Clients also felt that in cases where their equity was lost, providing further support would only pour good money after bad. Whilst not all banks decided to adopt this harder line of zero tolerance unless substantial fresh resources were brought into the table by their clients, a number of banks clearly did. The result was felt mostly among banks that had already decided to either quit shipping or to severely curtail their exposure with the shipping crisis accelerating this process. Our research clearly bears this out. Although banks nowadays have separate restructuring departments to handle either non performing loans or loans need of restructure, the strain on banks in managing such client situations, taking extra loss provisions in accordance with internal and external requirements and simultaneously seeking safe fresh ling opportunities, has been very high. Increasingly, a bank s board or credit committee would adopt much more demanding new ling criteria, which thwarted new business. Banks and the regulators increasingly looked into the banks risk management models and hardened them, in the light of the adverse market conditions and based on each bank s performance. Under the above trying conditions, it is not surprising that loan volumes decreased by 2.04%, over the year. In fact, it is a surprisingly low rate of decline, taking into account the problems faced by the shipfinance industry and the difficulty of new loans meeting the ever demanding bank requirements. We suspect that the decline will continue and may, perhaps, accelerate in 2016, as banks adopt a harder line across both existing and new ling. Despite the above, some banks clearly found the success formula to grow during this difficult period, with Credit Suisse, Citibank, ING, Unicredit, BNP Paribas and ABN Amro backing the tr. Of course, we also need to highlight the continuous growth (both in relative and absolute number) of all the Far East lers, who supported local newbuilding orders with new loans. Interestingly, some Far East banks and leasing entities have begun to focus on quality Greek names (both public and private), as the rate of new ordering has slackened and their experience with Greek owners has been largely positive. It should be noted, that according to VesselValues (National Geographic, ), the current Greek fleet s value is estimated at US91.1bn. The loan exposure of $62.7bn, therefore, represents a relatively high percentage of finance, at 68.8%, albeit at a time of record low vessel values across so many key shipping sectors.

30 Until last year, we had a two tier market, whereby the biggest Greek private and public names were able to borrow at attractive terms / pricing, whereas the medium to low size clients found such borrowing difficult. Over the last year, ling to medium or small owners largely disappeared, rering the shipfinance market a one tier market. The absence of shipfinance became very pronounced, especially over the past 6 months, with most lers either obtaining or scrutinizing applications to extreme lengths. This tr forced medium to small owners to look for alternative forms of finance from private equity funds or specialised financial boutiques. These, invariably, involved a much higher cost of capital / borrowing and a significant loss of control. As a number of private equity funds became singed by the recent crisis and realised that their earlier participations were mistimed, they too became highly selective and wary of entering into new ventures. This did not prevent at the recent Capital link event, for numerous new names to appear, keen to look at the new opportunities offered by low vessel prices and the promise of superior returns, once a recovery would take place. We have been trying to monitor and assess the participation of private equity funds in Greek shipping but the secretive nature of their exposure makes accurate research in this field impossible. Only in the event of compulsory regulatory disclosure would we be in a position to know the true exposure into Greek shipping by such funds. Another tr that has manifested itself is the purchase of vessels, at admittedly low values, for cash. This represents a very conservative and, arguably, the safest form of investment, with owners enjoying the lowest breakevens and, thus, enhanced ability to survive. Greek banks have fared badly during the preceding period, buffeted by the Greek crisis, capital controls, reduced liquidity and rising non-performing loans. Despite their capital increases, these banks found operating conditions difficult. In the absence of a definitive agreement with Greek lers and as client liquidity eroded, they had to scale back new ling. The shipping crisis, also, took its toll, as all the Greek banks were supportive of their clients over the past years but found that a number of them were unable to continue financing their losses and to provide additional equity in servicing their loans. Consequently, Greek bank shipfinance fell as a percentage of total Greek shipfinance from 17% to 14.6%, over the last year. Greek banks, though, were careful to maintain a minimum of fresh ling to core clients and have maintained their faith in Greek shipping. The continuing Greek crisis, now in its 6 th year, has also taken its toll, as a number of banks decided to terminate their Greek physical presence and switched their Greek business to be conducted from offices in London and elsewhere. As banks increasingly focused on major quality Greek names, they found that a physical presence is no longer required. It will be interesting to see if they shall be able to maintain their commitment to Greek shipping whilst operating from abroad. Although there have been some new names added to our list of Greek shipfinancing banks, their contribution has been marginal. All told, the share of European banks has continued to shrink, with the Far Eastern lers building up market share. The emphasis of new ling increasingly focused on newbuildings, as our research showed and this was achieved not only via bilateral loans but also via an increase of syndicated / club loans. 30

31 Banks have adjusted their minimum margins to reflect the scarcity of ling resources, the reduced competition among banks and the increased risk profile of shipping. The latter is inevitable, as banks decision to force the sale of even modern vessels in this low market, invariably resulted in sizeable loan losses, which affected each bank s risk assessment model. Increasingly, banks abandoned the sale en masse of part of their loan posrtfolios to private equity funds, as the discounts involved became too high and the funds buying appetite also reduced. Consequently, banks increasingly relied on vessel sales via the market and / or by their non performing clients. An interesting phenomenon is that unlike previous times, many banks refused to provide loans in support of vessel sales, even though they knew that this would result in a higher loan recovery. This clearly indicates the shipfinance aversion of many banks and / or their wish to reduce their shipping loan portfolios quickly. Looking into the future, it is obvious that the adjustment process by both the markets and the banks will continue over the next couple of years. As, however, the depressed shipping sectors shall recover, it is expected that shipfinance appetite shall return. The scene will be different, though, as the European domination will further weaken and Far Eastern and other nationality of banks will fill the vacuum. We envisage that new banks shall also join shipping, aiming for the small to medium owners. The risk / reward of shipfinance is changing and will become all too apparent when the recovery prospects for shipping will solidify. Although Greek shipfinance is not directly affected by the Greek crisis, it is nevertheless indirectly affected via the reduced ling ability of Greek banks and the possible departure of Greek owners to other more welcoming shipping centers, which may well signify their evolution away from the traditional Greek ownership model. Currently, Greek shipping is under threat, not only by the markets but, also, by the declining confidence in shipping by some banks, as well as the economic and tax instability of Greece. Up to now Greek owners have taken protective steps by opening offices elsewhere but relatively few have left Greece altogether. This position will be tested over the next year, as Greek owners look for ways not only to protect themselves but to also move closer to sources of capital and finance. 31