Market leading position in Slovenia. Successful balance sheet strengthening and de-risking of loan books in recent years. Self-funded deposit base in Slovenia and foreign core markets, with strong liquidity buffers. The COVID-19 pandemic has led to difficult economic and operating conditions for the bank's main markets. Pressure on earnings, asset quality, and capitalization in 2020/2021. Untested tail risks in Slovenia and higher risk countries. S&P Global Ratings' negative outlook on Slovenia-based Nova Ljubljanska Banka D.D. (NLB) indicates that over the next 24 months, we expect NLB will face downside risks in Slovenia and its core strategic markets in southeastern Europe (SEE). We also consider that NLB's potential large-scale acquisition of Serbian Komercijalna banka a.d. (KB) adds material risk to NLB's
