The outstanding loans of Greek-owned shipping companies rose to $24.8 billion in May 2004, a 31 percent rise from May 2002, according to a report by XRTC, a subsidiary of bank Credit Lyonnais. This loan portfolio is held by a total of 53 banks, from Greece and Cyprus (13), Germany (11), France (seven), the United States (five), Great Britain (four), the Netherlands (three), two each from Ireland, Italy, Norway and Switzerland, and one each from Luxembourg and South Korea. German banks actually hold the biggest share of the loans (32 percent), compared to 21 percent for Greek and Cypriot banks. Of these loans, 91 percent go to ocean-going shipping firms and only 9 percent to passenger shippers. The 13 Greek and Cypriot banks active in lending to the shipping sector are the National Bank of Greece, Alpha Credit Bank, EFG Eurobank Ergasias, Aegean Baltic Bank, First Business Bank, Piraeus Bank, Emporiki, General, Laiki, Egnatia, Agricultural, Omega and Bank of Cyprus. Of these, by far the most important are National Bank and Piraeus Bank. While National Bank has traditionally been the largest Greek lender to shipping firms, Piraeus Bank has arrived in second place through its recent takeovers of Xiosbank, Macedonia Thrace Bank, the Hellenic Industrial Development Bank (ETBA), as well as the Greek operations of Credit Lyonnais and National Westminster. Emporiki is in third place, slowly increasing its portfolio. According to the report, it was British banks that showed the greatest increase in their portfolio of loans to Greek shipping firms (61 percent), although this is mostly due to one bank, the rapidly expanding Royal Bank of Scotland, whose loan portfolio to Greek shippers has nearly doubled since 2002. German and Greek banks’ portfolios have increased by 43 percent and 42 percent, respectively, while French and Dutch banks also increased their portfolios significantly. On the opposite end, US banks, mainly the Bank of New York and JP Morgan Chase,have seen their portfolios shrink 22 percent over the past two years. «During the past two years, profit margins in the financing of the shipping industry declined significantly as the result of increased competition among the banks dealing with Greek shipping firms and improved market conditions that led shippers to raise the number of orders,» XRTC Managing Director Giorgos Xiradakis told Kathimerini. «As a result, the banks introduced a greater range of products and services, such as, for example, lease financing, tonnage tax and off-balance-sheet financing in order to make up for the lower profit margins. It is worth noting that profit margins on loans taken by Greek-owned shipping companies are significantly lower than in the global market,» he added.