As 2024 arrives, the implementation of the Basel IV framework is fast approaching. This is focusing minds, not only in banking, but across capital-intensive industries as the reality of the new rules begin to take hold. With the process of implementation already well underway in many jurisdictions, including the EU, the shipping industry looks to be particularly exposed to the resulting changes in banks’ risk modelling.
Increases in capital requirements and expanded safety nets for financings, along with adjustments to risk-weighted assets, are expected to lead to a further retreat by banks lending to the shipping industry. Those that remain will likely further shift their focus away from the smaller and middle-tier traditional shipping companies towards those with the best credit ratings — generally the larger, long-established operators.
