Ten years of poor results and loan losses have hobbled the lending ability of most banks that traditionally provided the lion’s share of capital to support shipping.
Demands from regulators and bank shareholders have squeezed the business from both sides. Investors want better returns, while regulators have tightened capital requirements especially against higher-risk activities such as ship finance.
As a result, shipowners, facing an estimated capital capacity shortfall of around $30bn per year, have been forced to look elsewhere to more expensive bond, equity and leasing markets for finance.
