Greek Shipping Loans Seen Falling to Six-Year Low as Rates Slump

Lending to Greek ship owners, who control more vessels than companies in any other nation, fell to a six-year low as charter rates extended losses and banks exited the industry, according to Petrofin Bank Research.

Lending fell 2.8 percent to $65.8 billion last year, the lowest since 2006, the research company said in an e-mailed report today. The decline was the biggest since an 8.5 percent contraction in 2009, its figures show.

Banks are curbing lending to the industry amid slumping vessel earnings and also because of a debt crisis in European countries including Greece, Petrofin said. The number providing loans to owners fell to 51 last year from 55 in 2011, while 21 shrank their portfolios by an average of 15 percent, according to the report.

“Banks have contributed via credit restrictions to the slowdown of ordering and to the restoration over time of a market equilibrium,” Petrofin said. “Whereas for large financially strong public and private Greek companies some ship finance is still available, there are virtually no prospects for the smaller to medium-sized owners, who are often reduced to cash buyers only.”

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