There are fewer banks in the market ready to provide shipping finance, particularly among international banks, as the financial crisis continues to constrain appetite.

There has been a ‘dramatic reduction’ in the number of global financial institutions ready to lend, Geir Sjurseth, managing director and global head of the offshore support group at DvB Bank, told delegates at Marine Money’s Gulf Ship Finance conference in Dubai.

He added that when there is appetite, banks prefer to finance offshore vessels, such as platform supply vessels, that ship to offshore oil platforms.

However, many regional banks are stepping in to fill the financing gap, often lending in local currency as opposed to US dollars, he said.

There is growing appetite in the bond market to buy shipping assets, but Sjurseth warns buyers to be aware of the ‘deteriorating quality’ of some issuers.

Although the banking crisis continues to hamper the supply of finance for the shipping sector, Sjurseth sees some positive trends, including the increasing amount of investment expected to pour into oil exploration and production, which should drive demand for vessels.