The Royal Bank of Scotland plc in Greece

By Kevin Oates

Introduction
Speak to most banks these days involved in ship financing and you definitely get the feeling that plain vanilla is… well…just too plain. The trend is definitely towards bigger, sexier deals which will result in arrangement fees as well as margins, as little perceived risk as possible either by lending on the back of a strong balance sheet or against secure long-term employment and essentially using as minute a portion as possible of their own balance sheet. That is why some of the big boys of shipping finance like Citibank and JP Morgan Chase, and many of the large European lenders, are heard of less these days but are nonetheless participating in the big deals as much as ever. Not so much as prime lender but as prime arranger.

It makes a change therefore that one major shipping bank with a global portfolio of about $4 billion is quite happy continuing to lend on a bilateral basis and surviving basically on margin, fee and direct ancillary business from the lending relationships. Not only that but over 60% of the shipping portfolio concerns Greek related lending. This too is something which is not near the top of the list of most major lenders. Over the years the bank has had various advertising slogans including “The Twenty Year Men” reflecting the fact that a number of the senior shipping executives in the bank have worked within the shipping department for over 20 years, and “The Shipowners Club” giving the impression that membership to the clientele is somewhat restricted. The bank is, of course, The Royal Bank of Scotland.

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