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Since 2008, global ship finance by the top 40 banks has fallen by 25%, whilst the global fleet grew by[ds_preview] 28%. The growth of the global fleet is increasingly funded from non-banking sources, primarily by leasing firms, mainly in the Far East, Petrofin reports in its latest analysis oft he global ship financing markets. During 2017, Chinese Leasing to shipping stood at 47 bn $.

Another 10 bn $ has been knocked off the portfolios of the top 40 banks over the last year, and global bank finance stands at the lowest level of the last eleven years. At the same time, the Far Eastern share has – despite a recent fall – increased from 32% to 33% as European banks are declining faster. For the first time, two Chinese banks top the market underlying the fundamental geographical shift taking place.

The »new kids on the block« consist of Chinese, Japanese, as well as Korean leasing companies, often linked to international Far Eastern banks. The leasing or bareboat hire purchase model is especially attractive to leasing companies, which have developed the know how to compete, whilst enjoying satisfactory profitability, Petrofin analysts say.

Looking into the future, Petrofin anticipates continued growth by leasing companies. »The same should be said of investment and equity funds, which have grown enormously over the last decade, most of which, however, focus primarily on the equity side of the business. Where lending is offered, their target yields are often very high (in excess of 12% p.a.), that only few owners can accept, despite the presence of grace periods and longer loan profiles,« the report says.