During 2024, Greek banks’ lending to Greek-owned ocean-going shipping increased from $15.8 billion at the end of 2023 to around $17 billion. This is despite the fact that the strong performance of the freight market in recent years has led many shipping companies to repay their loans ahead of maturity.

Greek banks, each at a different pace, continue to aggressively expand their shipping portfolios, as the sector is seen as a pool of low-risk and, in any case, assessable customers that can generate high interest income.

According to sources monitoring these figures, it is estimated that, during 2024, bank financing to Greek-owned ocean-going shipping rose from $15.8 billion at the end of 2023 to approximately $17 billion. This is despite the fact that the favorable trends in the freight market in recent years have prompted many shipping companies to repay their loans before their due dates.

In addition to the four systemic banks (National Bank, Eurobank, Alpha, and Piraeus) and Aegean Baltic Bank, Pancreta Bank, which merged with Attica Bank in 2023, is reported to have further increased its shipping loans, which were at $74 million in 2023.

Moreover, total financing of Greek-owned ocean-going shipping has also increased, including loans from both Greek and foreign banks, rising from $50.9 billion a year ago, mainly due to the growth of Greek portfolios.

The issue has not escaped the attention of international banking analysts, such as Morningstar DBRS. In its report on the European banking sector earlier this month, it noted that Greek banks are moving in the opposite direction compared to their counterparts in other countries. German and Scandinavian banks are retreating, French banks are dominating, and Greek banks are ranked at the top in terms of relevant market shares.

DBRS recalls that the global financial crisis of 2008 was a turning point for the shipping sector, as international trade volumes fell drastically, leading to an increase in bad loans and high provisions for such loans. Some banks, mainly German, Scandinavian, and British, had to be rescued by their governments due to significant losses or were even closed down entirely. As a result, the regulatory framework became stricter, and the sector became more cautious toward shipping loans.

Today, according to DBRS, large French banks – BNP Paribas, Credit Agricole, and Societe Generale – are among the largest financiers of shipping. However, due to their size, their exposure to the shipping sector constitutes only 2% of their total loan portfolios.

The four major Greek banks are now ranked, according to the credit rating agency, among the leading providers of shipping credit in Europe. Given the smaller size of their portfolios, shipping loans on average make up 8% of their total portfolios, although this fact is not considered negative.

Source: Ekathimerini.com