The credit rating agency Fitch upgraded the creditworthiness of the four systemic Greek banks, citing as reasons, among others, the improvement of their capital position and profitability as well as the reduction of their non-performing loans.
In particular, the house upgraded Ethniki and Eurobank to BB grade with stable outlook from BB- and Alpha Bank and Piraeus to BB- grade with stable outlook from B+ and B, respectively.
For Ethniki it states that “the upgrade reflects the structural improvement in its profitability due to higher interest rates and low deposit rates, careful cost management and the normalization of burdens from problem loans. This has allowed National to accumulate capital well above regulatory requirements and given it the strategic flexibility to drive investment and growth initiatives, which we expect will result in greater sustainability of the business model.”
For Eurobank, Fitch notes that the upgrade reflects “the structural improvement in its profitability due to higher interest rates and low deposit rates, careful cost management and the smoothing of the burden of non-performing loans. This has allowed the bank to accumulate capital, strengthening the ‘cushions’ in relation to regulatory requirements and has provided greater flexibility to pursue investment and growth initiatives, which we expect will result in greater sustainability of the business model.”
For Alpha Bank he notes that “the upgrade reflects the structural improvement in its profitability, which will further strengthen capital formation and lead to stronger capital ratios. The upgrade also reflects the continued decline in the NPL ratio, stable funding and improved access to the debt market to meet the minimum requirements for own funds and eligible liabilities (MREL).”
For Piraeus, the house notes that the upgrade “reflects the acceleration of the balance sheet de-risking strategy, which has led to a significant reduction in its non-performing loans (NPE) ratio to levels closer to those of other higher-rated banks . It also reflects the strengthening of its regulatory capital ratios and the subsequent reduction in the capital charge from troubled assets, for which provisions had not been made. The upgrade also takes into account Piraeus’ structurally improved profitability which will further strengthen its capital accumulation, stable funding and improved access to debt markets to meet minimum equity and eligible liabilities (MREL) requirements.”
The article Fitch has upgraded the creditworthiness of the four Greek systemic banks was published on NewsIT .