Aegean Baltic Bank S.A.

The positive outlook on ABB reflects our view that Greek banks will likely face reduced economic and industry risks over the next 12 months, which will be supportive for ABB's creditworthiness. We could revise the outlook to stable if we conclude that: The industry or economic risks faced by the Greek banking sector are unlikely to reduce in the next two years. ABB's funding or liquidity profile deteriorate because of its high asset-liability mismatches or outflows of deposits. ABB's asset quality deteriorates compared with historical levels. The bank proves unable to preserve its sound capitalization. Specifically, this could occur if the RAC ratio falls closer to or below 10% on a sustained basis, mostly due to rising credit losses or

...Aegean Baltic Bank S.A. (ABB) remains small in domestic and global terms and primarily operates a concentrated business model centered on shipping. Despite ABB's rapid lending growth, its business remains heavily concentrated on Greek shipowners, leaving it, in S&P Global Ratings' view, more vulnerable to adverse operating conditions than peers. As of Dec. 31, 2022, the lending book was more than double what it was in 2020, outpacing sector growth, supported by ABB's cleaner balance sheet and stronger capitalization than those of its Greek peers. In the first 10 months of 2023, however, the bank's loan book had shrunk by 4%, reflecting early repayment of cash-rich shipowners against the rise in interest rates. Still, we anticipate that ABB will continue to execute its lending expansion strategy going into 2024, targeting a 75% shipping and 25% corporate lending split....

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