Rating action

Scope Ratings GmbH (Scope) has affirmed ABBank’s issuer rating of BB with a Stable Outlook.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

Business model assessment: Focused (Low). The issuer rating is anchored by the Focused (Low) business model assessment. ABBank is a specialised lender focused on shipping finance, with total assets of EUR 1.2bn as of December 2024. While shipping is a highly cyclical activity, it is largely decoupled from the Greek economy; this enabled the bank to weather the domestic sovereign crisis. The bank’s recent expansion into onshore corporate lending adds to its business diversification.

Since 2018, the bank has been diversifying by lending to Greek onshore companies, mainly operating in sectors that share common features with shipping, i.e., commercial real estate, manufacturing, renewable energy, and construction. Following two years of plateau, ABBank targets strong balance sheet expansion from 2026, as well as a 70/30 split of the loan book between shipping and non-shipping. While the bank has a proven track record in shipping, it has yet to be tested in onshore corporate lending. And it remains to be seen whether rapid volume growth could be sustained without materially affecting the bank's risk profile.

Scope does not expect that the current strategy will be significantly disrupted, though the recent change in ownership and control of the bank, as well as the appointment of a new CEO, could bring new strategic options and opportunities for growth.

Operating environment assessment: Moderately supportive (High). The bank is based in Greece (Moderately supportive high). Greece is a small economy within the EU, with a GDP per capita well below the euro area average. The high level of public debt may constrain the Greek government from providing support to the economy during downturns in the context of the rigid European fiscal framework. Scope acknowledges the reduction in the country’s public-debt ratio and general government deficit on the back of sustained economic growth, elevated inflation, and primary budget surpluses. The banking sector is dominated by four banks, which have significantly reduced non-performing exposures since 2018 and now exhibit solid financial metrics.

Greece is part of the European Banking Union, which has brought about a significant strengthening and harmonisation in bank regulation and supervision under the ECB’s Single Supervisory Mechanism, which we consider to be supportive of financial stability. The European Central Bank also shares with national central banks the role of lender of last resort, which limits illiquidity risks to the banks.

Scope arrives at an initial mapping of bb- based on a combined assessment of the issuer’s operating environment and business model.

Long-term sustainability assessment (ESG factor): Neutral. The assessment reflects Scope’s view that the issuer is embracing changes to ensure the long term sustainability of its business model. Progress made may be tangible but does not warrant further credit differentiation.

In Scope’s view, intrinsically high governance risks are well managed, as evidenced by the bank’s strong track record. In February 2025, ABBank announced that the Swiss entity Aegean Baltic Holding AG, controlled by the Greek billionaire Aristotelis Mistakidis, had successfully completed the acquisition of 47.9% of the bank’s share capital, in addition to further 20% of voting rights.

Theodoros Afthonidis, the bank’s founder and CEO since its inception, will step down from his role as CEO by the end of November 2025, but continues to maintain a 27.4% ownership stake in the bank. The position will be taken over, subject to the necessary regulatory approvals, by Aristeidis Vourakis – current CEO of AstroBank in Cyprus, with over 25 years of experience in international banking. Scope does not expect the change in control and leadership to materially affect the bank’s prudent approach to risk taking.

ABBank has been gradually incorporating ESG risk factors in its internal procedures and decision-making. In 2024, the bank worked on action plans to address the ECB supervisory expectations related to the management of environmental risks. Scope believes that ABBank is prepared for managing this challenge, as it has long experience managing environmental risks that can affect the value of ships used as collateral.

Digital considerations are not material for ABBank’s rating. Shipping finance is a relationship-based business, where in-depth knowledge of the customer and human interaction are key. Therefore, the risk of product commoditisation or competition from digital-only players is limited.

The long-term sustainability assessment leads to an adjusted rating anchor of bb-.

Earnings capacity and risk exposures assessment: Supportive (+1). The assessment reflects Scope’s view that earnings capacity is stable through economic cycles and provides a strong buffer against losses. Risks are well managed and are highly unlikely to lead to losses capable of undermining the issuer’s viability.

Over the past three years, the widening of interest margins led to record results, while loan growth halted amid early repayments by shipping customers. Revenue growth allowed the bank to invest, hiring almost 30 people since 2021 while maintaining a cost/income ratio below 50%. Loan performance was strong, and cumulated provisions were close to nil from 2021 to 2024.

With interest rates falling, management targets ambitious loan growth, with volumes set to double by the end of 2027. Projections indicate a return on equity in the low double digits in the 2025-27 period. Scope sees downside risks to these forecasts, particularly on revenues if the bank falls short of its growth targets amid strong competition in Greek shipping finance.

Asset quality remains solid, reflecting management's prudent risk appetite, high levels of collateralisation, and a favourable economic cycle, in which shipowners are profitable and liquid. As of YE 2024, the gross non-performing exposure ratio stood at 0.7%, which is well below the national average.

Scope recognises the bank’s strong track record in managing credit risk. Due to the highly concentrated portfolio and relatively low number of transactions, the bank has chosen to centralise the origination, underwriting, approval and monitoring of credit exposures.

Financial viability management assessment: Adequate. The assessment reflects Scope’s view that financial viability management provides some buffer and, under a base case scenario, could not imminently push any metric close to minimum requirements or jeopardise the issuer’s financial viability.

Maintaining a strong capital adequacy is a core priority for the bank. As of YE 2024, ABBank’s minimum capital buffer was very high - above 14% as of YE 2024 - mainly reflecting stagnation in loan growth and the bank’s decision to fully retain its net income for future growth. Management expects the CET1 ratio to gradually decline to around 21% by 2027 from 28%. This would imply a minimum capital buffer of more than 700 bp, which Scope considers comfortable.

Funding risk is elevated due to the bank’s reliance on large, uninsured deposits and reflects the high degree of customer concentration. Positively, the group holds large liquidity buffers and targets a low loan-to-deposit ratio to mitigate risks. The liquidity coverage ratio and the net stable funding ratio were 447% and 165%, respectively, as of YE 2024.

One or more key drivers of the credit rating action are considered an ESG factor.

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s view that the risks to the current rating are balanced.

The upside scenario for the rating and Outlook is:

1. Well managed growth, both in the shipping and in onshore corporate segments, coupled with increasing diversification of funding sources could lead to an upgrade of the group’s business model assessment

The downside scenarios for the rating and Outlook are (individually or collectively):

1. Material worsening of asset quality metrics, potentially from rapid expansion into industry sectors where the bank does not have a long track record, could lead to a lower qualifier for earnings capacity and risk exposure
    
2. A sharp decline in profitability, with no signs of a recovery, would have a negative effect on earnings capacity and risk exposure qualifier
    
3. Evidence of a less prudent approach to capital management and/or a decline in liquidity buffers, leading to a lower assessment of financial viability management

Environmental, social and governance (ESG) factors

Please refer to the ‘long-term sustainability assessment’ under the ‘key rating drivers’ section above for the ESG analysis.

All rating actions and rated entities

Aegean Baltic Bank SA

Issuer rating: BB/Stable, affirmation

Stress testing & cash flow analysis
No stress testing was performed. No cash flow analysis was performed.

Methodology
The methodology used for this Credit Rating and Outlook, (Financial Institutions Rating Methodology, 18 September 2025), is available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Rating if the Credit Rating were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Rating: public domain, the Rated Entity, and Scope Ratings’ internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting the Credit Rating originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Rating and Outlook and the principal grounds on which the Credit Rating and Outlook are based. Following that review, the Credit Rating and Outlook were not amended before being issued

Regulatory disclosures
The Credit Rating and Outlook are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Rating and Outlook are UK-endorsed.
Lead analyst: Alessandro Boratti, Associate Director
Person responsible for approval of the Credit Rating: Marco Troiano, Managing Director
The Credit Rating/Outlook was first released by Scope Ratings on 26 June 2024.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use / exclusion of liability
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