China’s third largest shipping lease financier is committed to greater involvement in the business by operating more of the vessels it finances rather than just providing funds.

Jerry Yang, chief executive officer, shipping leasing at Minsheng Financial Leasing, said he was doing more operating leases rather than pure finance leases partly in response to pressure from its shareholders for results.

“The fact is we are doing more and more operating leases,” he told TradeWinds’ Shipowners Forum Greater China in Shanghai. “We are looking at being an asset operator rather than just a money provider.”

Chinese leasing is today one of the most significant sources of finance for shipping, although the market has slowed due to sluggish newbuilding markets prompting players to look at financing more resale deals.

“Our appetite will be on operations: from money to tonnage,” said Yang.

“By-the-by we are becoming more and more like an industry player, although we are still not there yet.”

Yang said today around 44% of the market was in finance leases with the remaining 56% in operating leases.

Some 75% of the total lease book is international and denominated in US dollars with the remaining 25% domestic Chinese RMB denominated business.

Chinese leasing has seen phenomenal growth in the 10 years since the first deals were done. From zero the Chinese lease portfolio grew to about $43bn (RMB 300bn) at the end of 2018.

Of the 12 or so active leasing firms market leader ICBC Leasing has $12bn, BoComm Leasing $9.2bn, Minsheng $6bn, and CMB Leasing $5.3bn.

“As a group of industry players ‘we are coming!’” Yang said.

“It’s hard to say Chinese leasing can do something totally new, but we can bring some new elements.”

Chinese leasing firms have focused business on sound so-called tier 1 borrowers, with Minsheng counting Cargill, Maersk, MSC, CMA CGM and Sinokor among its clients.

“We find the strong partners and help make them stronger,” said Yang.

Minsheng has an ‘asset heavy’ appetite but needed to generate adequate returns to satisfy its shareholders which was pushing it towards the operating lease model.

“We need to find out what kind of investor we want to be. We need to have long-term thinking.”

Minsheng has acquired some second-hand vessels which it operates on a bareboat and time-charter basis, Yang added.