Aegean Baltic Bank S.A.

Solid capitalization Sound risk management, with conservative underwriting and strong expertise in shipping Significant cyclical credit risk from a monoline business model Operations in the challenging Greek environment Low efficiency due to lack of economies of scale The stable outlook balances risks and benefits attached to Aegean Baltic Bank S.A.'s (ABB) new five-year strategy to diversify away from shipping into small and midsize enterprises (SMEs) and other businesses in Greece. S&P Global Ratings expects the loan book will expand at a pace of about 40% per year and will gradually become more granular, while the share of volatile shipping lending will gradually decrease. Also, ABB's direct exposure to Greece's slowly recovering operating environment will increase, bringing with it some execution

...Outlook: Stable The stable outlook balances risks and benefits attached to Aegean Baltic Bank S.A.'s (ABB) new five-year strategy to diversify away from shipping into small and midsize enterprises (SMEs) and other businesses in Greece. S&P Global Ratings expects the loan book will expand at a pace of about 40% per year and will gradually become more granular, while the share of volatile shipping lending will gradually decrease. Also, ABB's direct exposure to Greece's slowly recovering operating environment will increase, bringing with it some execution risks, a changing risk profile, funding challenges, and competition from long-established, large players. These factors aside, we expect the bank's high capitalization and good quality to remain supportive for its planned rapid growth and the resulting higher near-term exposure to Greece's economy. We anticipate ABB's risk-adjusted capital (RAC) ratio will remain comfortably above 10% in the next 12 months and its nonperforming asset levels...

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