HANSA 11-2019

FINANZIERUNG | FINANCING
UK seeks leading role in »green finance«
The role of London and the UK as a provider of shipping finance is much reduced from
what it once was. However, this could soon change again and a closer look is worthwhile
Banks like RBS (Royal Bank of Scotland)
– once the largest lender to
Greek shipowners – and NatWest have
exited the sector, although there is talk
of the latter becoming interested in maritime-related
lending again.
In their recent study of London’s competitiveness
as a maritime cluster, consultants
PwC ranked London as only 8 th
among the world’s major international
shipping hubs in the category of Finance,
compared to 1st in the other maritime
business services of Insurance, Law and
Shipbroking.
But the UK is now trying to rebuild its
position as a centre of expertise in ship finance,
most notably with a focus on the
emerging field of Green Finance, as detailed
below. At the same time it could be
argued that the amount of traditional ship
lending by banks is itself much reduced,
with alternative sources of finance such
as US private equity and Chinese leasing
companies having stepped in to fill the
gap. Until recently, bank debt finance accounted
for as much as 70-80% of global
ship lending, it is reckoned, but now only
has a share of more like 50%.
In addition, London’s role as one of the
world’s leading financial centres means
virtually every major bank and financial
institution has representation in the UK
capital. To draw an analogy with personal
banking, the convenience lies in having a
bank with a local you can visit for consultation
when needed, rather than one actually
headquartered nearby.
Then there is the aforementioned presence
of insurance, shipbroking and in legal
expertise in London, the latter in particular
being an increasingly important
factor in today’s complex finance deals.
»Every serious shipping
financial institution will be part
of it as soon as possible«
Michael Parker, Citigroup
International law firm Norton Rose Fulbright
conducted a survey relating to maritime
financial services in 2015 in which
40% of respondents in the shipping sector
reported that London was the financial
centre most able to meet their financing
needs, with other competitors ranked
substantially lower – New York at 14%,
Singapore at 7%, Frankfurt at 6%, and
Hong Kong at 5%. No surprise then, the
firm’s Global Head of Transport Harry
Theochari, widely considered one of the
world’s leading ship finance lawyers, is
based in London.
A similar situation exists at US multinational
investment bank Citi, where its
Chairman of Global Shipping, Logistics &
Offshore, eminent ship financier Michael
Parker, resides in London despite Citigroup’s
headquarters being in New York.
Speaking recently at London International
Shipping Week 2019 (LISW), Parker
described London’s role as one of the
world’s most important financial centres
as »the really essential requirement for
any major maritime cluster,« especially
given ongoing consolidation and corporatisation
of the shipping industry.
The presence of the IMO (International
Maritime Organization) is also »absolutely
crucial« to London as a maritime
cluster, he added, because it gathers all
parties interested in regulatory matters
to the city, and will become increasingly
26 HANSA International Maritime Journal 11 | 2019