An overview of the Global Ship Finance industry

Transcription

1 28 th Annual Ship Finance & Investment forum 2014 London 1 st December 2015 An overview of the Global Ship Finance industry presented by Ted Petropoulos HEAD

2 Presentation outline 1. The global ship finance market 2. Current ship finance trends 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? 5. Summary and Conclusions

3 1. The global ship finance market Global ship lending figures (drawn and committed) as of November 2015 are estimated at $475bn (Petrofin Research ). The above includes the offshore support sector but excludes rigs and shipyard finance

4 1. The global ship finance market Given the total no of vessels in the global fleet of 90,518 in November 2015, 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 $5.24 per vessel.

5 1. The global ship finance market In Graph 1, we present the latest Petrofin Bank Research on the shipping loan portfolio of the top 40 global ship finance banks amounting to $397.9bn of total loans (83.76% of the total, as opposed to 82.24% in2014 and 86% of 2013 s total).

6 Graph 1 Bank Lending to Shipping Ship finance based on interim data up to November 2015 in $bn Top 40 ship finance banks portfolios stand at US$397.9 as of November 2015 Top 40 ship finance banks portfolios stand at US$ as of November 2014 DnB Bank of China Korea Exim KfW ICBC (including Leasing) Nordea China Exim HSH Nordbank (Core Bank) DVB Credit Suisse BNP Paribas BTMU Nord LB Citibank SMBC China Development Bank Commerzbank ABN Amro Credit Agricole RBS HSBC Deutsche Bank ING Bremer Landesbank Danish Ship Finance Korea Development Bank Standard and Chartererd Danske Bank/Fokus Bank SEB DBS Unicredit Bank of America Merril Lynch Japan Bank for International Co-operation Santander CIT Group Piraeus Bank Swedbank National Bank of Greece Commonwealth Bank of Australia Societe General

7 Graph 2 Top 40 Bank Lending to Shipping Bank ship finance based on data up to November 2015 in $bn 480 Top 40 Banks Lending to shipping Source: Petrofin Bank Research November 2015

8 1. The global ship finance market Last year, the top 6 banks share was approx % (with a combined portfolio of $125.88bn). This year the top 6 banks share is 30.28% (with a combined portfolio of $120.5), down 4.3% from Lastly, European bank exposure accounts for 62.3% in November 2015: European bank exposure % of global total % % % % % %

9 Graph 3 $ Top 40 banks in terms of geographical position, portfolios and percentage hold of the totals 2010 to 2015 $ $ $ $ $ $ $ $ $66.40 $60.00 $10.00 $ $40.00 Europe USA Far East and Australasia Source: Petrofin Bank Research November 2015

10 Graph 4 European banks Comparison between 2010 and up to November Other $ UK and Ireland France and Belgium $ Greece Germany Holland $ $ $ $ $ UK and Ireland France and Belgium Holland Germany Greece Scandinavia Other European

11 Trends in Ship Finance Sources Other France and Belgium Greece Holland Germany Source: Marine Money October / November 2015

12 90% Average Loan Pricing Spreads % 70% Other UK and Ireland % France and Belgium 50% Holland % Greece % 20% Germany % 50 0% < Average Average Spread 0 Graph 5 Source: Petrofin Research Initially based on Marine Money Bankers Survey 2014

13 2. Current Ship finance trends 1. Further shipfinance global slowdown is anticipated for the next 1-2 years. Downward pressures are due to: a) selective new lending, b) repayment of existing loan portfolios, c) active loan recoveries, vessel sales / auctions 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. g) Poor state and prospects of most shipping sectors making lending decisions much harder h) Client liquidity under increasing pressure

14 2. Current Ship finance trends 2. Opposing forces are: a) passing of ECB stress tests by all the European shipping banks b) Attractive risk/rewards of lending to targeted clients, c) Clean up of loan portfolio would provide growth opportunities, and d) Low value of vessels offering a better timing for new loans.

15 2. Current Ship finance trends 3. Global banking conditions (especially in the West) still remain unsupportive for ship finance (Basel III, liquidity and capital constraints). 4. Current estimates by IMF, OECD, Clarkson s for 2015/2016 international trade growth has fallen to approximately 2% overall, of which dry bulk is zero. 5. The fleet growth for 2015 and expected 2016 has decelerated, i.e. to 2.5% y on y growth in dry bulk. It is anticipated that as newbuilding orders in dry bulk have collapsed and as newbuilding deliveries may be extended further or cancelled or abandoned or converted, that the fleet growth for 2016 and 2017 may continue to display low growth

16 2. Current Ship finance trends 6. The wet sector is showing a pick up in net fleet growth to about 3% pa which is expected to grow further, due to the massive newbuilding orders. There has been a pick up in crude oil demand by 4% and oil products by 6% as a result mainly of the fall in oil prices. Prospects for the tanker sector appear promising but the order book has started to grow and at 17.8% of the fleet has outgrown dry bulk s 16.8%. 7. Fleet supply growth is still constrained by increased port congestion, slow steaming and longer routes and a 10% increase in scrapping in 2015 thus far. Dry bulk scrapping is up by 79% whilst tankers are down by 69% and containers down by 59%.

17 2. Current Ship finance trends 8. Bank shipping loan provisions are rising due to a) accelerated loan recoveries, b) sell off of portfolios, c) reduction of shipping exposure by some leading banks and d) shifting of risk between clients. 9. 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.

18 2. Current Ship finance trends 10. Distress 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 by central banks and higher discount values. 11. Shift of ship finance eastwards. Far Eastern ship leasing, export finance and bareboat deals shall accelerate if a) market conditions improve and b) Chinese lending restrictions are eased

19 2. Current Ship finance trends 12. Private equity funds interest in shipping (Oaktree, Carlisle, Blushore Global Equity, Monarch Alternative, Nordic Capital, Eaton Park Capital, etc.) which exploded in , has now reduced / concentrated into specialized sectors only. As equity funds have not achieved their rewards and many are showing negative returns, their commitment to shipping and patience is expected to be tested. 13. Private equity provided by individuals too has accelerated as there are strong incentives for investing in shipping, e.g. real asset, tax issues, recovery potential. Hence, private equity has the advantage over private equity funds, as it has a longer investment horizon and less pressure to exit at specific times.

20 2. Current Ship finance trends 14. Cohabitation in loans/investments became more commonplace between banks, owners and equity providers. Issues may arise when PEFs wish to exit. 15. Client selection has become excessive. The level of due diligence has intensified and is seen by many owners as being intrusive and extreme. Very few of initially promising loans make it to drawdown and the approval procedure has lengthened.

21 2. Current Ship finance trends 16. Has the ship financing model changed? Not really, but overall lending percentages have fallen, terms tightened and liquidity issues have risen to the top. 17. 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 in some sectors, e.g. LPG. 18. The number of existing players with a growing appetite is small but growing, e.g. ABN, Credit Suisse and all the Far Eastern Banks.

22 2. Current Ship finance trends 19. Most analysts still point to as weak for a shipping and banking recovery. International growth expectations and global economic conditions remain at risk. Most analysts expect the tanker sector (crude and products) to be strong in 2016 but peak in the next 18 months. 20. Quantitative easing across the world, as well as low LIBOR remain helpful to shipping but there are years of another financial crisis. 21. In conclusion, a market recovery has been put back for dry bulk, container and the offshore sectors. Shipfinance is still expected to turn around but from 2017 onwards, as 2016 shall still be a year of adjustment.

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

24 Bankers Survey Results of a Top International Ship Finance Bankers survey, conducted by Petrofin Research November 2015

25 We posed, in October/November, 16 questions to 22 top ship finance bankers, who collectively hold about $203.05bn in shipping loan portfolios, or approx. 51% of top 40 international bank shipfinance totals ($397.9bn) or 42.7% of global shipfinance (approx. 475bn). The results are as follows:

26 % Q1: Do you think that the DRY shipping freight market for 2016 Bankers responses a. The same as now b. Higher 63.64% 18.18% c. Lower 18.18% d. Much lower 0% Responses 2014 Q1: Do you think that the DRY shipping freight 5 market for 2015 will be 2 1 Responses % 18.18% a. The same as now b. Higher c. Lower d. Much lower a. The same as now 18.18% Responses Responses % b. Higher c. Lower d. Much lower Do you think that the DRY shipping freight markets for 2012 shall be: 24.14% a. The same as now 72.41% 3.45% b. Higher c. Lower d. Much lower Q1: Do you think that the DRY shipping freight markets for 2013 shall be 60.71% a. The same as now 10.71% 28.57% b. Higher c. Lower d. Much lower Q1: Do you think that the DRY shipping freight market for % a. The same as now 55.00% b. Higher c. Lower d. Much lower

27 Q2: Do you think that the TANKERS shipping freight markets for 2016 shall be: % 68.18% Bankers responses a. The same as now 31.82% b. Higher 0% c. Lower 68.18% d. Much higher 0% Responses 2014 Q2: Do you think that the TANKERS freight market for 2015 shall be: % a. The same as now b. Higher c. Lower d. Much higher 2 1 a. The same as now 13.64% b. Higher c. Lower d. Much higher Responses Responses Responses Do you think that the TANKERS shipping freight markets for 2012 shall be: 51.72% a. The same as now 24.14% 24.14% b. Higher c. Lower d. Much higher 45.00% % % % % Q2: Do you think that the TANKER shipping freight markets for 2013 shall be 39.29% a. The same as now 42.86% 17.86% b. Higher c. Lower d. Much higher Q2: Do you think that the TANKERS shipping freight markets for 2014 shall be: % a. The same as now 35.00% b. Higher c. Lower d. Much higher

28 Q3: Do you think that the CONTAINER shipping freight markets for 2016 shall be 45.00% % % % % 40.91% a. The same as now 27.27% 31.82% Bankers responses a. The same as now 40.91% b. Higher 27.27% c. Lower 31.82% d. Much lower 0% b. Higher c. Lower d. Much lower Responses Responses Responses Responses 2014 Q3: Do you think that the CONTAINER shipping freight market for 2015 shall be 59.09% a. The same as now 22.73% 18.18% b. Higher c. Lower d. Much lower Do you think that the CONTAINER shipping freight markets for 2012 shall be: 27.59% a. The same as now 13.79% 58.62% b. Higher c. Lower d. Much lower Q3: Do you think that the CONTAINER shipping freight markets for 2013 shall be 5 a. The same as now 21.43% 28.57% b. Higher c. Lower d. Much lower Q3: Do you think that the CONTAINER shipping freight markets for 2014 shall be % 45.00% a. The same as now 1 b. Higher c. Lower d. Much lower

29 Q4: Do you think that second hand vessel prices for dry bulk for 2016 shall be: % % % % % 45.45% 13.64% 40.91% a. The same as now b. Higher c. Lower d. Much lower Responses Responses Bankers responses a. The same as now 45.45% b. Higher 13.64% c. Lower 40.91% d. Much lower 0% Responses 2014 Q4: Do you think that second hand vessel prices for dry bulk for 2015 shall be 22.73% a. The same as now 18.18% Responses % b. Higher c. Lower d. Much lower Do you think that second hand vessel prices for Dry bulk for 2012 shall be: 13.79% a. The same as now 86.21% b. Higher c. Lower d. Much lower Q4: Do you think that second hand vessel prices for dry bulk for 2013 shall be 28.57% a. The same as now 7.14% 64.29% b. Higher c. Lower d. Much lower Q4: Do you think that second hand vessel prices for dry bulk for 2014 shall be: 2 a. The same as now 75.00% 5.00% b. Higher c. Lower d. Much lower

30 Q5: When do you believe that equilibrium between demand and supply will be reached in the dry bulk sector: % 5 Bankers responses a. In % b. In % c. In % d. In 2019 and beyond 9.09% % 9.09% Q5: When do you believe that equilibrium between demand and supply will be reached in the dry bulk sector? a. In 2016 b. In 2017 c. In 2018 d. In 2019 and beyond Responses % 7.14% a. In 2013 b. In 2014 c. In 2015 d. In 2016 and beyond Responses Q5: When do you believe that equilibrium between demand and supply will be reached in the dry bulk sector: 5.00% 55.00% 2 2 a. In 2014 b. In 2015 c. In 2016 d. In 2017 and beyond % Responses Q5: When do you believe that equilibrium between demand and supply will be reached in the dry bulk sector: 40.91% 45.45% 4.55% a. In 2015 b. In 2016 c. In 2017 d. In 2018 and beyond

31 Q6: Do you expect China's growth, currently running at about 6%, in 2016 to: % Bankers responses a. Stay the same 68.18% b. Rise to 7% 0% c. Rise above 7% 4.55% d. Drop to 5% 27.27% e. Drop below 5% 0% Responses 2014 Q6: Do you expect China's growth, currently running at about 7%, in the next 12 months to: % % 45.45% 1 a. Stay the same 4.55% b. Rise to 7% c. Rise above 7% d. Drop to 5% e. Drop below 5% a. Stay the same b. Rise to 8% c. Rise d. Drop e. Drop above 8% to 6% below 6% Responses Responses Responses Do you expect China's growth currently at about 9.5%, in the next 12 months to: 24.14% a. Stay the same 3.45% b. Rise to 10% c. Rise over 10% 72.41% d. Drop to 6-8% e. Drop below 6% Q6: Do you expect China s growth, currently at about 7%, in the next 12 months to 42.86% a. Stay the same 28.57% b. Rise to 8% 3.57% c. Rise above 8% 21.43% d. Drop to 6% 3.57% e. Drop below 6% Q6: Do you expect China's growth, currently running at about 7.5%, in the next 12 months to: 6 a. Stay the same 1 b. Rise to 8% c. Rise above 8% 3 d. Drop e. Drop to 6% below 6%

32 Q7: Do you think that global economic growth over the period will be: 31.82% 68.18% Bankers responses a. Under 2% 31.82% b. 3-4% 68.18% c. Between 4-5% 0% d. Over 5% 0% a. Under 2% b. 3-4% c. Between 4-5% d. Over 5% Bankers responses 2 1 Responses Q7: Do you think that global economic growth over the period will be: 27.27% a. Under 2% 72.73% b. 3-4% c. d. Over 5% Between 4-5% Responses Responses Responses Do you think that global economic growth over the period will be: 34.48% a. Under 2% 55.17% 10.34% b. 3-4% c. d. Over Between 4-5% 5% Q7: Do you think that global economic growth over the period will be 32.14% a. Under 2% 67.86% b. 3-4% c. d. Over 5% Between 4-5% Q7: Do you think that global economic growth over the period will be: 2 a. Under 2% 8 b. 3-4% c. Between 4-5% d. Over 5%

33 Q8: Do you think that European ship finance activity will revive in: % 72.73% 13.64% Bankers responses a % b % c % d and beyond 9.09% 9.09% a b c d and beyond % % % % % 45.45% Responses Q8: Do you think that European ship finance activity will revive in: 27.27% 22.73% 4.55% a b c d and beyond Responses Responses Responses Do you think that European ship finance activity will revive in: 34.48% 41.38% 24.14% a b c d and beyond Q8: Do you think that European ship finance activity will revive in 35.71% 32.14% 32.14% a b c d and beyond Q8: Do you think that European ship finance activity will revive in: % % % % 15.00% % 2 a b c d and beyond

34 a. Increase by over 10% Q9: Do you expect the overall global ship finance loan portfolio (loans + commitments) in 2016 to: 13.64% b. Increase by up to 10% 63.64% c. Stay the same Bankers responses a. Increase by over 10% 0% b. Increase by up to 10% 13.64% c. Stay the same 63.64% d. Reduce up to 10% 13.64% e. Reduce by over 10% 9.09% 13.64% d. Reduce up to 10% 9.09% e. Reduce by over 10% Responses Q9: Do you expect the overall global ship finance loan portfolio (loans + commitments) in 2015 to: 9.09% a. Increase by over 10% 31.82% b. Increase by up to 10% 45.45% c. Stay the same 9.09% 4.55% d. Reduce up to 10% e. Reduce by over 10% Responses Responses Responses Do you expect the overall global ship finance loan portfolio (loans+commitments) in 2012 to: a. Increase by over 10% 13.79% b. Increase by up to 10% 20.69% c. Stay the same 48.28% 17.24% d. e. Reduce upreduce by to 10% over 10% Q9: Do you expect the overall global ship finance loan portfolio (loans + commitments) in 2013 to: a. b. Increase by Increase by over 10% up to 10% 21.43% c. Stay the same 57.14% d. Reduce up to 10% 21.43% e. Reduce by over 10% Q9: Do you expect the overall global ship finance loan portfolio (loans + commitments) in 2014 to: 15.00% a. Increase by over 10% 5.00% b. Increase by up to 10% 5 3 c. Stay d. Reduce the same up to 10% e. Reduce by over 10%

35 Q10: For your own institution, do you expect your ship finance portfolio (loans + commitments) in 2016 to Bankers responses a. Increase by over 10% 22.73% b. Increase by up to 10% 13.64% c. Stay the same 50% d. Reduce up to 10% 9.09% e. Reduce by more than 10% 4.55% Responses % a. Increase by over 10% 13.64% b. Increase by up to 10% c. Stay the same 9.09% 4.55% d. Reduce up e. Reduce by to 10% more than 10% Q10: For your own institution, do you expect your ship finance portfolio (loans + commitments) in 2015 to % % % % 27.27% 27.27% a. Increase by over 10% b. Increase by up to 10% 36.36% c. Stay the same 9.09% d. Reduce up to 10% e. Reduce by more than 10% Responses Responses Responses For your own institution, do you expect your ship finance portfolio (loans+commitments) in 12 months' time to: 10.34% 20.69% a. b. Increase by Increase by over 10% up to 10% 37.93% c. Stay the same 6.90% d. Reduce up to 10% 20.69% e. Reduce by more than 10% Q10: For your own institution, do you expect your ship finance portfolio (loans + commitments) in 12 months' time to: % 10.71% a. Increase by over 10% b. Increase by up to 10% 21.43% c. Stay the same 39.29% d. Reduce up to 10% 14.29% e. Reduce by more than 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% 15.00% 15.00% b. Increase by up to 10% c. Stay the same 5 d. Reduce up to 10% e. Reduce by more than 10%

36 7 Q11: Do you expect loan spreads for new shipping loans (currently about bps) over the next 12 months, to: 63.64% Bankers responses a. Stay the same 63.64% b. Rise 27.27% c. Fall 9.09% Responses Q11: Do you expect loan spreads for new shipping loans (currently about bps) over the next 12 months, to: % % % % a. Stay the same b. Rise c. Fall a. Stay the same b. Rise c. Fall Responses Responses Responses Assuming for new shipping loans that loan spreads (currently about bps) over the next months, do you expect loan spreads to: 55.17% % 4 2 a. Stay the same b. Rise c. Fall Q11: Do you expect that loan spreads (currently about bps) over the next 12 months, to 67.86% a. Stay the same 32.14% b. Rise c. Fall Q11: Do you expect loan spreads for new shipping loans (currently about bps) over the next 12 months, to: % a. Stay the same % b. Rise c. Fall

37 Q12: Do you foresee for 2016 non-performing loans to % Bankers responses a. Stay the same 27.27% b. Rise 72.73% c. Fall 0% d. Rise significantly 0% 5 4 Responses Q12: Do you foresee for 2015 non-performing loans % a. Stay the same as now b. Rise c. Fall d. Rise significantly 40.91% 40.91% 45.00% % % % % a. Stay the same as now 18.18% c. Fall Responses Responses Responses Do you foresee for 2012 non-performing loans to: % a. Stay the same 82.76% 13.79% b. Rise c. Fall d. Rise significantly 10 5 Q12: Do you foresee for 2013 non-performing loans to 3.57% a. Stay the same 78.57% 17.86% b. Rise c. Fall d. Rise significantly Q12: Do you foresee for 2014 non-performing loans 55.00% a. Stay the same as now 35.00% 5.00% 5.00% b. Rise c. Fall d. Rise significantly

38 Q13 (New question): Is interest in bilateral shipfinance lending on a permanent decline: 8 7 Bankers responses a. Agree strongly 4.55% b. Agree mildly 13.64% c. Disagree mildly 68.18% d. Disagree strongly 13.64% 68.18% % 13.64% % a. Agree strongly b. Agree mildly c. Disagree mildly d. Disagree strongly

39 Q14: Over the next 2-3 years, will ship finance from non-bank sources, i.e. private equity, stock markets, etc. play 45.00% % % % Bankers responses a. A similar role 40.91% b. Higher 18.18% c. Lower 40.91% 18.18% 40.91% Responses Q14: Over the next 2-3 years, will ship finance from non-bank sources, i.e. private equity, stock markets, etc. play 15.00% % % a. A similar role b. Higher c. Lower a. A similar role 27.27% b. Higher c. Lower Responses Responses Responses Over the next 2-3 years, will ship finance from non-bank sources, i.e. private equity, stock markets, etc. play 34.48% a. A similar role 55.17% 10.34% 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 25.00% a. A similar role 75.00% 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 % a. A similar role 75.00% b. Higher c. Lower

40 Q15: Do you foresee the current shipping crisis, across all main sectors barring tankers, to last for a further: % Bankers responses a. 1 year 27.27% b. 2 years 54.55% c. 3 years 18.18% d. 4 years 0% Responses % Q15: Do you foresee the current shipping crisis (across all sectors) to last for a further: % 62.07% 14:. Do you foresee the current shipping crisis (across all sectors) to last for: 24.14% a. 1 year b. 2 years c. 3 years d. 4 years Do you foresee the current shipping crisis (across all sectors) to last for a further 18.18% 10.71% 85.71% 3.57% a. 1 year b. 2 years c. 3 years d. 4 years Responses Responses Responses a. 1 year b. 2 years c. 3 years d. 4 years 45.00% % % % % Q15: Do you foresee the current shipping crisis (across all sectors) to last for a further: % 35.00% 54.55% % 5.00% a. 1 year b. 2 years c. 3 years d. 4 years a. 1 year b. 2 years c. 3 years d. 4 years

41 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 9.09% c. Breakeven 27.27% d. Negative 59.09% e. Disastrous 4.55% 59.09% % % a. Very satisfactory b. Satisfactory c. Breakeven d. Negative e. Disastrous Responses 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: a. Very satisfactory 13.64% b. Satisfactory 45.45% 40.91% c. Breakeven d. Negative e. Disastrous 4.55%

42 4. What is the risk appetite for shipping finance by banks? 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, November 2013, November 2014 and November 2015 to determine if the ship finance climate is improving, has remained static, or is worsening. 3. The results are shown in Graph 6, below:

43 Graph 6 6 Global ship finance portfolios Autumn 2010, Top 40 banks: $466.76bn November 2011, Top 40 banks: $ bn November 2012, Top 40 banks: $422.13bn November 2013, Top 40 banks: $400.89bn November 2014, Top 40 banks: $391.45bn November 2015, Top 40 banks: $397.9 November % 5 Banks with neutral/unclear policy/capacity Banks with reduced capacity 46.10% 44.97% Banks with lending capacity % 39.16% 37.20% % 33.92% 30.41% 30.32% 33.84% 29.58% 31.31% 32.24% 24.32% 23.72% 25.76% % 1 Autumn 2010 Nov-11 Nov-12 Dec-13 Nov-14 Nov-15 Autumn 2010 Nov-11 Nov-12 Dec-13 Nov-14 Nov-15 Autumn 2010 Nov-11 Nov-12 Dec-13 Nov-14 Nov-15

44 5. Summary and conclusions 1. Global economic conditions are still fragile. It is unclear when international growth and demand across many sectors shall rise. 2. Prospects for a shipping market recovery over the next 1-2 years remains in doubt. 3. Newbuilding order deliveries and international trade growth remain the keys to a sustainable recovery. 4. Western banks due to own constraints still lagging behind. 5. Private equity is currently licking its wounds from investing in dry bulk out the offshore sector and is patiently awaiting market developments. 6. Keep your seat belts fastened, it will be a bumpy ride.

45 Thank you December 2015