Banking on the High Seas: A Resurgence in Ship Finance
The world of ship finance is experiencing a resurgence, with global bank lending to shipping climbing back above $300 billion in 2025, according to the latest annual Petrofin Global Bank Research report. This marks a clear recovery after years of consolidation, as the industry emerges from the shadows of the financial crisis. But what does this resurgence mean for the future of shipping finance? And what are the implications for the broader global economy?
One of the standout features of this recovery is the return of Greek banks. Petrofin reports that Greek banks grew their shipping loan books by a staggering 37% year-on-year to $23.6 billion, up from $18 billion in 2024. This surge has lifted Greece’s market share to 7.8%, a significant increase from the previous year. Scandinavian banks are also recovering strongly, increasing lending by 16.2% to $26.2 billion after an 8% decline the previous year. These regional shifts highlight the changing dynamics of the shipping finance landscape.
The recovery is also being fueled by strong cash flows, rising vessel values, and a larger orderbook. The Clarkson’s Price Index rose from 176 in 2024 to 191 at the end of 2025, while the total value of the fleet and orderbook rose from $2.03 trillion in December 2024 to $2.166 trillion at the end of 2025 and then to $2.381 trillion by May 2026. This indicates a healthy and growing industry, with strong fundamentals supporting the resurgence in lending.
However, the report also highlights the impact of geopolitics on finance flows. Threatened US penalties on Chinese owners, Chinese-linked vessels, and vessels entering the US prompted some owners, especially listed companies, to reduce their exposure to Chinese leasing structures and convert leases into bank loans. This shift benefited major international banks like Citi and ING, although Chinese leasing resumed once the threat of penalties subsided. This highlights the complex interplay between geopolitics and the shipping finance industry.
Borrowing conditions have also improved, with competition pushing loan margins lower. Mid-sized owners are now able to secure margins of around 1.5% to 1.9% when backed by strong parent guarantees and liquidity. Arrangement fees have fallen to well below 1%, while loan-to-value ratios remain around 60%. These improved conditions are making it easier for shipping companies to access financing, which is crucial for their operations and growth.
Sustainability-linked finance is also growing, with Poseidon Principles banks focused on bilateral lending holding portfolios of more than $200 billion. Even non-signatory banks are using the Poseidon methodology, indicating a broader acceptance of environmental, social, and governance (ESG) criteria in the industry. However, the pace of environmental investment has slowed amid uncertainty over technology and cost, which could be a concern for the long-term sustainability of the industry.
The outlook for ship finance is more cautious, with Petrofin expecting bank lending to grow modestly in 2026 and 2027. This growth will be supported by newbuilding finance, higher fleet values, and limited scrapping. However, banks are becoming more careful on loan-to-value ratios and increasingly focused on financially strong clients as vessel prices remain high relative to earnings. This suggests that the industry is moving towards a more selective and cautious approach to lending.
In conclusion, the resurgence in ship finance is a positive sign for the industry and the global economy. However, it also highlights the complex interplay between geopolitics, finance, and the shipping industry. As the industry continues to evolve, it will be crucial to monitor the impact of these dynamics on the broader global economy and the future of shipping finance.
