Scope Ratings gave Aegean Baltic Bank a BB credit rating with a stable outlook. As the house notes, this assessment reflects the bank’s focus on financing the shipping sector, strong potential profitability and asset quality indicators, which are the best in the Greek banking system.

On the possible risks for ABBank, Scope reports the concentration of its customer base and the bank’s funding profile.

As Scope notes, although the shipping industry is highly cyclical, it is largely disconnected from the Greek economy, which enabled the bank to overcome the debt crisis that hit Greece. ABBank’s recent expansion into onshore corporate lending (real estate, manufacturing, renewable energy and construction) reinforces the diversification of its activities.

The bank aims for strong balance sheet expansion in 2024-2026, as well as a 70/30 ratio between maritime and non-maritime loans in its portfolio. As analysts point out, while has a proven track record in shipping, has not yet been tested in lending to other businesses. And it remains to be seen whether the rapid growth in volumes can be sustained without materially affecting the bank’s risk profile.

Scope estimates that the change in the bank’s shareholding structure and its control by Ar. Mystakidis it will not disrupt its current strategy. However, it speaks to a degree of uncertainty, especially regarding possible changes in key executives.

It is noted that ABBank showed a net profit of 7.3 million euros for the first quarter, increased by 4% on an annual basis. This was mainly due to better management of total assets and customer deposits, which grew at an annual rate of around 15% to €1.24 billion and €1.07 billion, respectively.

Loan volume after provisions shrank 6% quarter-on-quarter to around 480 million euros as “new production did not offset early payments/repayments that continued in the first quarter of 2024,” the bank said.

Liquidity levels however remained at robust levels, with the loan-to-deposit ratio at 50% and the loan-coverage ratio exceeding 490%.

THE CET1 capital ratio stood at 26.5% and the non-performing loan ratio at just 0.9%.