RBS Gets Offers for Its Greek Ship Finance Business

After being faced with a number of bad shipping loans due to a sluggish demand in the shipping industry, the Royal Bank of Scotland has received bids for its Greek ship finance business, worth around USD 3 billion, Reuters cited banking and financial sources familiar with the matter.

However, problems with lending to the industry, which is currently in deep downturn, would affect the value of what could be recouped via a sale, the sources told Reuters, adding that Credit Suisse and China Merchants were among the suitors bidding.

Namely, RBS, which is 73-percent state-owned, has opted to sell its business as it aims to return to profit after eight straight years of losses.

The bank is currently in the midst of a restructuring.

The bank’s total shipping exposure reached GBP 7.1 billion (USD 10.5 billion) in the first quarter of this year, down from GBP 7.5 billion at the end of last year, while its non-performing loans to the industry increased to GBP 827 million from GBP 434 million for the periods.

The announcement follows European Central Bank’s (ECB) decision to launch a review into the risks of bank’s shipping exposure.

ECB’s move has raised concerns among the lenders, as they fear that they might be forced to reserve additional capital and increase loss provisions related to the shipping sector, Reuters earlier said.

World Maritime News Staff