Biggest Chinese bank takes delivery of two of 14 newbuildings

THE Industrial and Commercial Bank of China (ICBC), the world's biggest bank by market value and deposits, has taken delivery of the first two ships in a 14-ship order that are part of two deals with Chinese companies worth US$853 million.

"The shipping industry is still very new in China but the bank industry wants to use its resources to help heavy industries so that they can grow," said ICBC shipping finance manager David Lan.

"We have maintained the power to support our industry, but perhaps in the overseas market that is not the case. So we are delivering a range of vessels and we are able to continue to support the industry," he said

Mr Lan added that lending in China is likely to grow in the long term "because of the close relationship that is developing between banks and shipowners," the report said.

As one of China's "Big Four" pillar banks, ICBC is said to have first become involved in ship owning in June 2008 "but details of its massive investment have only now emerged," reports Trade Winds.

It said ICBC will wholly own at least 14 vessels through subsidiary ICBC Financial Leasing Co Ltd. The ships are being built by China State Shipbuilding Corp (CSSC) and at other yards. The bank already took delivery earlier this year of the 53,300-dead weight tons Gong Yin 1 from CSSC's Chengxi Shipyard.

The ships are reported to be going on long-term charters to two Chinese companies that will eventually take over ownership of the vessels.

The major deal is with Huaneng Energy & Communications Holding Co which is expected to take at least 12 of the vessels worth CNY5.3 billion (US$776 million) in what is being describes as the largest ship-leasing deal in China that was signed in June 2008. This comes after China's Banking Regulation Commission relaxed the laws on permitting banks to establish leasing subsidiaries in 2007.

The CSC Shenzhen, a transporter of cars and the ships and a subsidiary of Sinotrans Changjiang Group, is taking two of the ICBC vessels in the second deal worth CNY530 million (US$77.6 million).

The vessels are pure car/truck carriers (PCTCs). One of them was delivered last week and the other is expected to arrive in March, both from Jiangsu Jinling Shipyard.

The report said the CSC Shenzhen will pay charter fees over 12 years before it takes the vessels into its fleet. It signed the deal with ICBC in December 2008.

Source: www.schednet.com