Aegean Baltic Bank S.A.

The positive outlook on ABB reflects our view that Greek banks will likely face reduced industry risks action over the next 12 months, which will be supportive for 's creditworthiness. In our view, ABB's improved profitability prospects in line with the rest of the Greek banking system. We would consider raising our long-term issuer credit rating on ABB by one notch to 'B+' if our view was that industry risks for Greek banks had reduced sustainably, all else being equal. This could happen, for example, if we observed a material improvement in the stability and diversification of the sector's funding base. We could revise our outlook to stable if we conclude that: The industry risks faced by the Greek banking

...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 its loan portfolio as of Dec. 31, 2022, is more than double of what it was two years ago, 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 pursue aggressive lending expansion going into 2023. Although it is fragile due to ABB's concentrated exposure to the shipping industry, the asset quality track record remains strong. As of end-2022, ABB demonstrated stronger asset-quality metrics than the domestic system average, with the bank's nonperforming exposure (NPE) and coverage ratios reaching 1.1% and 100%, respectively. We believe that the bank's conservative...

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