Large banks-financiers of shipping are limiting lending, as they seek ways to address the European debt crisis. However, the liquidity needs of shipping companies are increasing, as the crisis in freight market persists.
European and Greek banks face the need to increase funds in view of the Greek PSI program and the new wave of bad debts, caused by recession, and choose to trim loans in order to increase capital adequacy ratio. Thus no ship-owner, besides the most powerful ones, can get loans easily.
According to reliable sources, European financial institutions (mainly French banks) do not proceed with refinancing of loan maturing, while some of them warn customers to transfer borrowing elsewhere. Greek shipping borrowing exceeds $60 billion according to Petrofin and Datalogic figures, while Greek banks are estimated to have openings of $15 billion.
Greek banks face huge problems like those of Germany, which are active in shipping. Additionally, French BNP Paribas, Societe Generale and Credit Agricole cut lending and close shipping units.
(source: capital)
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