Credit Suisse has reportedly lost interest in acquiring any part of Royal Bank of Scotland’s (RBS) over $5billion Greek ship finance business unit, opening the way for China Merchants Bank (CMB) to make an inroad into European ship finance.
Mid-June RBS reportedly received bids from Credit Suisse and China Merchants Bank (CMB) for its Greek shipping finance business.
However, Credit Suisse, the current top lender to Greek shipping is said to have lost interest at the due diligence stage. Neither Credit Suisse nor RBS has commented on this report.
If confirmed it will likely mean the Chinese conglomerate will have a clear run should it decide to mount a bid in the ever warming financial climate between Greece and China.
The British bank is 73% state-owned following a £46bn ($59.6bn) bailout in 2008 and is known to have been looking for more than a year for a buyer of its once market-leading Piraeus shipping operation as pressure on RBS mounts to concentrate on UK domestic clients.
Analysts note RBS has owners like Peter G Livanos and John A Angelicoussis in its stable, attractive clients for private wealth business.
Though RBS has always publicly insisted it has not lost money on shipping, and has given repeated reassurances it remains committed to the industry, but it has been reducing its shipping book since the beginning of the global financial crisis.
According to the annual ship finance survey by Petrofin Research, five years ago (end 2010) RBS’ Greek book stood at $12.34bn, more than double the second biggest lender, Deutche Schiffsbank’s $5.566bn. At the dawn of this year, Petrofin put RBS’ Greek book at $5.2bn, now second to Credit Suisse’s $6.72bn. Total lending to shipping stood at $62.7bn at the end of 2015, down from $64bn at the end of 2014, according to Petrofin.
It is known CMB has been looking for shipping and commodities-related assets in Europe, for sometime and this development could cement the growing relationship between Greece and China.
The latest Petrofin survey does not include China-state owned CMB among the top 30 lenders to Greek shipping all of which have books of over $200m. However, there are three Chinese lenders in the group, China Exim Bank, about $2.4bn, China Development Bank, $1.85bn, and China Everbright Bank with a $650m loan book to Greeks.
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