Aegean Baltic Bank S.A.

The stable outlook on ABB reflects the balance between risks over the next 12 months in the shipping industry stemming from the deep global economic shock, and ABB's sound capital position and good financial track record. We anticipate that ABB will preserve its solvency, with a RAC ratio that remains above 10% through 2021-2022, and maintain adequate funding and liquidity and high collateralization in its loan book. However, the bank's high concentration in the highly volatile shipping industry makes it more vulnerable to the downside risks we see in our global economic forecasts. We could lower the rating if we conclude that: ABB's asset quality has significantly deteriorated compared with historical levels. The bank proves unable to preserve its sound

...Aegean Baltic Bank S.A. (ABB) remains small in domestic and global terms and primarily operates a monoline business model centered on shipping. ABB has expanded rapidly and more than tripled its loan portfolio over the past three years, outpacing sector growth, supported by its cleaner balance sheet and stronger capitalization than its Greek peers. Nevertheless, ABB's business remains heavily concentrated on Greek shipowners, in S&P Global Ratings' view, leaving it more vulnerable to adverse operating conditions than peers. We anticipate that ABB will aim for more cautious growth in 2022. Although it is fragile due to ABB's concentrated exposure to the shipping industry, the asset quality track record remains strong. On Sept. 30, 2021, ABB demonstrated stronger asset-quality metrics than the domestic system average, with the bank's nonperforming exposure (NPE) and coverage ratios reaching 3.7% and 48.1%, respectively. We believe that the bank's conservative and well-developed risk-management...

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