Standard Chartered will boost ship financing this year despite a slump in many segments of the seaborne trade, scenting growth while other lenders pull back due to capital constraints, the bank's global head of shipping said. The industry is now in a fifth year of one of its worst downturns on record after shipping firms ordered large numbers of new vessels between 2007 and 2009 - just in time for the collapse of the global economy after the 2008 financial crisis.
Nigel Anton joined Standard Chartered, who are most active in Asia, Africa and the Middle East, in August 2007 to start and grow ship lending at the bank. "Our late entrance into the market meant we were not really exposed to the issues some of the other banks have faced who were active in 2005-2007," Hong Kong-based Anton told Reuters.
"Other banks that were there before are no longer able to lend in the shipping sphere because they need the capital. We have room to grow." He said the bank's debt book had grown from zero in 2007 to over $4 billion currently. His recruitment of a team specialising in leasing in 2010 has also led to the acquisition of some 33 shipping assets with a value of some $1 billion. "We don't have any specific targets but we will definitely grow again this year. We have closed a number of transactions since the start of the year already," he said.
Banks including France's BNP Paribas, Britain's Lloyds Banking Group and Germany's HSH Nordbank are lending less to shipping as they shrink their balance sheets to reduce risk and as tougher regulation requires them to hold more capital, making loans less profitable.
Standard Chartered was the 12th biggest arranger of syndicated ship loans over the past 15 months with 8 deals and $353.96 million committed, Thomson Reuters LPC data showed, compared with $3.38 billion by sector leader DNB. Global syndicated lending in the first quarter of this year rose to $7.84 billion, from $2.84 billion in the fourth quarter of last year, helped by $1.5 billion in financing for Africa.
While the bank started out financing more traditional shipping assets in terms of dry bulk and tankers, in the last two years it has shifted more to the offshore side, including drill ships and rigs, with an estimated 55 percent of its portfolio now focused on the offshore sector, he added.
"I still see my pipeline being pretty much offshore with a focus in oil and gas. I still see activity in traditional shipping," he said. "Everyone is looking for those green shoots of recovery in the tanker and dry market but I don't see anything right now. 2014 is looking more positive but the 'market' still needs to get through 2013.
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