Ships on credit. Banks have invested over $300 billion in building new ships [REPORT]

Greece, China, and Japan are investing in shipping, but it is Chinese shipyards that are benefiting from shipowners’ investment activity and the opening of bank vaults and credit lines. The top 40 banks have invested over $300 billion, a 6% increase compared to the $283.6 billion lent to shipowners in 2024.

Global banks have become key participants in the ship finance market in 2025. BNP Paribas continues to lead in tonnage investments, according to the latest Petrofin Research report.

European banks created the largest ship financing system. Of the 40 largest banks involved in tonnage investments, 50.4% of loans originate from European bank vaults. Western European bankers have invested $151 billion in shipbuilding, according to the 18th Petrofin Research Report, published in mid-July of this year.

Asian and Australian (APAC) banks recovered from their losses in 2024 and saw their involvement in shipbuilding increase by 8.3%. Last year, Japanese banks increased their share of the top 40 banks from 22% in 2024 to 26% in 2025. American banks also became more actively involved in the development of shipping, increasing their loan portfolios by 6.7%.

BNP Paribas continues to lead the way in bank ship financing. No bank withdrawals from ship financing were recorded in 2025. The vast majority of banks maintained their involvement in tonnage investments or even increased their loan amounts.

Supported Banks

However, banks are not the only participants in the shipbuilding financing process. Among other things, loans for the construction of a fleet of Polish-named gas carriers for Knutsen OAS Shipping were arranged and secured by international banking consortiums, including leading French banks such as Société Générale and BNP Paribas. Stephenson Harwood, among others, advised BNP Paribas on a $205.8 million financing for Navigator Gas in 2026. On July 2nd, the law firm Stephenson Harwood LLP reported that it “advised BNP Paribas on a $205.8 million financing, comprising a pre-delivery bridge line and a Japanese operating lease with option to purchase (JOLCO) agreement for two newbuild liquefied natural gas carriers for Navigator Holdings Ltd. (“Navigator Gas”).”

The transaction involved BNP Paribas, acting through its Paris office, agreeing to provide a pre-delivery secured credit line of up to $164.6 million to Navigator Gas. The credit line was provided to the owner and operator of the world’s largest fleet of 48 handysize liquefied natural gas carriers. The loan was used to finance the construction of two newbuild liquefied natural gas carriers being built by Jiangnan Shipyard (Group) Co., Ltd. and China Shipbuilding Trading Co., Ltd. in China.

Incidentally, it is worth mentioning that 13 On July 2026, the company signed definitive agreements for the sale of eight gas carriers, as well as its shares in the joint venture Unigas International B.V. (“Pula Unigas”), for approximately USD 183 million. Following the delivery of the vessels, the term loan will be refinanced and converted into long-term JOLCO financing, arranged by BNP Paribas. The French bank will execute the transaction through its Tokyo branch.

This is one example of a fleet development financing arrangement, with SBI Leasing Services acting as the capital guarantor for JOLCO (Japanese Operating Lease with Call Option), providing the capital portion of the JOLCO financing. Delivery of the vessels is expected in 2027.

Petrofin Global Index. Source: Petrofin Research Report 2026.

Arab Assets in a Gas Carrier

Watson Farley & Williams (“WFW”) announced that it advised Warba Bank and served as lead legal counsel, along with BNP Paribas and Tide Capital as co-arrangers, in the first cross-border private placement of sukuk (Islamic investment certificates). Norfra led the issuance. Norfra is one of the specialized subsidiaries established by the Knutsen Group. These entities (e.g., Norfra LNG 37, Norfra LNG 31) are French companies focused on managing large-capacity LNG carriers.

For example, Norfra LNG 37 SAS is the French subsidiary of the Norwegian shipowner Knutsen Group, operating and leasing a 174,000 m³ LNG carrier operating on a long-term charter for operations contracted in Qatar. Norfra is part of Ocean Yield’s investment portfolio, holding a 50% stake.

The Sukuk issuance is secured by receivables under a Murabaha commodity agreement between Norfra and Warba Bank. Warba Bank acted as lead arranger, initial bond purchaser, and Murabaha investment agent, and provided Shariah approval for the transaction. This sophisticated financing spans three jurisdictions – Norway, France, and Kuwait. The transaction was challenging to address “all relevant cross-regional regulatory, legal, and tax issues.”

Warba Bank’s private placement of Sukuk (secured by Murabaha commodity receivables) led by Watson Farley & Williams won three prestigious “Deal of the Year 2024” awards from Islamic Finance News for the Norfra LNG 37 SAS transaction.

The cross-border sukuk is part of Knutsen Group’s capital contribution to a new shipbuilding project – a 174,000 m³ LNG carrier. The vessel, scheduled for delivery in 2026, will be time-chartered. It is worth noting that Knutsen Group is one of the largest European LNG shipowners and the second largest in France.

Ship order portfolio structure by country. Source: SEA Europe

China a beneficiary, Greece a leading investor

Greece, China, and Japan are investing in shipping, but it is Chinese shipyards that are benefiting from shipowners’ investment activity, open bank vaults, and credit lines. Leading shipowners from China, Greece, and Japan are ordering ships, and shipyard docks and production halls are filled to capacity. China leads the way with contracts worth 72.8 million GT. Greek shipowners are waiting for ships with a total tonnage of 53.2 million GT.

Japanese investors entered the second quarter of 2026 with a portfolio exceeding 27.4 million GT. Similar figures are observed in the order portfolio for ships with engines powered by gas or fuels replacing fossil fuels. Japan is ahead of Greece, with a portfolio exceeding 17 million GT for ships with main engines powered by gas or alternative fuels. Interestingly, Japan has shown the greatest commitment to installing engines running on alternative fuels, with a staggering 62% of its orders coming from ships powered by gas or other fuels. Chinese operators secured a 33% share, while Greek shipowners accounted for only 26% of global orders for ships using gas or other fuels.

 

Ship order backlog of leading countries. Source: Clarkson’s, Petrofin Research.

In the first half of 2026, Chinese shipyards received twice as many new orders as during the same period in 2025, according to data from Clarkson’s analysts, cited by all agencies. Of the 1,481 ships ordered during this period, China received 1,131 orders representing 31 million GT.

This represents approximately 72% of the total market share. China maintained its dominant position in the industry, which it strengthened in 2025. China has received the majority of global shipbuilding orders for four years in a row. Its advantage over its closest competitor, South Korea, is steadily growing, including in the construction of high-technology vessels, such as LNG carriers and ships with alternative fuel engines.

Greek banks and shipowners riding the wave

Greeks not only dominate the EU market as shipowners, but also last year. Greek banks have seen impressive growth in activity in the maritime transport market. Greek loans increased by 37% in 2025. Greek banks entered 2026 with a total loan portfolio dedicated to fleet construction of $23.6 billion ($18 billion in 2024). Greece’s market share increased from 6.1% to 7.8% in 2025.

The shares of French, Belgian, Dutch, and German banks in the global tonnage loan portfolio remain similar. The National Bank of Greece is a leading Greek bank supporting the development of the shipping sector. Eurobank, Piraeus Bank, and Alpha Bank are listed on the market with lower exposure.

Petrofin Research Bank Ranking. Source: Petrofin Research Report 2026.

These four banks are currently among the 40 largest global banks financing shipping. Scandinavian banks have also seen significant growth in lending activity. Loans to this sector increased by 16.2% in 2025. Their exposure last year reached USD 26.2 billion.

According to Petrofin Research, the total value of bank loans granted by all banks, including local banks, amounted to approximately USD 425 billion. This represents just over 60% of the global shipbuilding finance market. Petrofin conservatively estimates that USD 680 billion was involved in shipbuilding financing in various forms.

In addition to the previously mentioned forms, all forms of credit were included – leasing, export financing, and alternative financing. The global order book is expected to have increased by 7% to $2.17 trillion, compared to $2.03 trillion committed in 2024.

Politics and Geopolitics implications in tonnage financing

Petrofin Research analysts also sought to identify the impact of politics and geopolitics on tonnage financing. Their findings indicate that in 2025, “US policy temporarily impacted non-bank lending, as the targets were Chinese ships and vessels acquired under Chinese leasing.” As a result, the strong upward trend in Chinese shipyard production from 2024 was temporarily halted.

However, banks filled the gap in loan demand by introducing refinancing and supporting themselves with new forms of financing. However, loans for Chinese production quickly began to grow once US threats of restrictions and penalties were withdrawn.

“Lending conditions improved in 2025, benefiting borrowers, as competition increased,” Petrofin Research emphasized in a July report. Investors reported strong cash flows and increased liquidity, particularly as the year progressed. Petrofin noted that “lenders were not negatively impacted by geopolitical events in the Middle East and Iran, nor by the ongoing trade tensions between the US and China.”

Demand factored in the supply of loans. The increase in the supply of funds for ship financing was driven by the growing market. The fact that ship values ​​and contract volumes also increased significantly throughout the year played a significant role in increasing the supply and volume of loans.

Petrofin Research analysts are very conservative in their forecasts for market developments. On the supply side, competition between banks remains intense. The large money supply “leads to a further decline in loan margins and more flexible terms [for loan acquisition and repayment – ​​Ministry of Economy].

However, it should be noted that banks are aware that maritime transport markets are currently susceptible to declines in profitability in the near future. Therefore, when negotiating loans, financial institutions have begun to take a more cautious approach to the LTV (Loan to Value) ratio. Today, loans are available only to clients with a strong market position and solid financial condition.

According to Petrofin Research, the total value of global bank loans at the end of 2025 was estimated at approximately $425 billion. This amount is expected to increase slightly in 2026/2027. The increase will be driven by a growing portfolio for new shipbuilding. An additional factor is the rising value of the fleet. The forecast of a slight increase is based on banks’ efforts to reduce risk and maintain the LTV ratio at the 2025 level.