Newbuild cancellations have led to a significant reduction of the global shipping loan portfolio, estimated to have fallen from $450bn in 2008 to nearly 410-$420bn.

During the first nine months of 2009 new financing fell to $25.6bn, from $72.2bn, during the same period a year ago, reports.

Global financial service firm Petrofin said mergers and acquisitions have reduced the number of lending banks from 40 down to 35.

According to estimates, by the end of 2008 the world’s 32 biggest shipping banks controlled 90.5% of total loans, or $407.4bn.

Seven out of the 32 largest banks, representing 42% of market share or $171.1bn, are expected to significantly reduce their portfolios in 2010.