A previous report from Reuters had suggested the RBS Greek portfolio was available, but the bank’s plans were revealed to extend much further with the possibility of a full exit from the industry being considered as part of a strategic review.
Executives at Diana Shipping, an RBS client, were pressed during its second quarter conference call on Friday whether an RBS exit would create buying opportunities for owners or a drag on asset prices.
President Stacey Margaronis replied: “RBS is very old established bank that know shipping very well. And I don’t think that whatever they do, they will do it in a disorderly manner.
“I think anything they’ll do is going to be orderly and very professional.
“Don’t forget that they have been perhaps one of the two banks, only two banks which have been the oldest established banks, going back to Williams Deacon’s Williams Inc and now Royal Bank of Scotland.
“So whatever they are going to do, it’s going to be orderly and professional.”
RBS’s full shipping book was £10.4bn ($16.26bn) at the end of 2014, according to its last annual report. This marks a fall from £11.4bn at the end of 2013, due to loan repayments and secondary sales, the report says.
At the close of last year, £7.9bn of RBS’s shipping book related to vessels in the water. Dry bulk made up 38% of the portfolio, with tankers at 29%, boxships 17% and gas 10%, the report adds.
A finance source told TradeWinds the bank’s thoughts to exit shipping have nothing to do with the Greek crisis.
“This is nothing to do with Greece in isolation,” a well-placed source said. “The bank’s strategy is to become UK-focused and is shipping the best bet for that? It’s not related to Greece and the Greek problems.”
Finance experts tell TradeWinds that RBS may struggle to sell the shipping division as one. Given the varying conditions and health of the various sectors, they will attract contrasting prices, a leading finance man points out.
“It would be easier to get a better price in smaller bits,” he said.
A spokesperson for RBS confirmed the market suspicions in a statement provided to TradeWinds: “RBS Shipping is a strong franchise with one of the most significant portfolios in European finance.
“In light of our wider strategy to create a simpler, stronger, and more sustainable bank, better aligned to the needs of our customers in the UK and Western Europe, we are actively exploring alternative strategic options for our shipping business, including a possible business sale.”
