Greek systemic banks earned credit upgrades from credit agencies Fitch and Moody’s on Tuesday following a recent round of upgrades of Greece’s credit rating.
Fitch Ratings upgraded Eurobank SA’s Long-Term Issuer Default Ratings (IDRs) to ‘BB’ from ‘BB-‘, and Viability Ratings (VRs) to ‘bb’ from ‘bb-‘. The outlooks on the Long-Term IDRs are Stable.
It also upgraded the National Bank of Greece SA’s Long-Term Issuer Default Rating (IDR) to ‘BB’ from ‘BB-‘ and Viability Rating (VR) to ‘bb’ from ‘bb-‘. The outlook on the Long-Term IDR is Stable.
Piraeus Bank SA’s Long-Term Issuer Default Rating (IDR) was upgraded to ‘BB-‘ from ‘B’ and Viability Rating (VR) to ‘bb-‘ from ‘b’. The outlook on the Long-Term IDR is Stable.
Fitch Ratings has upgraded Alpha Bank SA’s Long-Term Issuer Default Ratings (IDRs) to ‘BB-‘ from ‘B+’ and Viability Ratings (VRs) to ‘bb-‘ from ‘b+’. The outlooks on the Long-Term IDRs are Stable.
Moody’s follows Fitch in upgrading Greek banks
Moody’s Investors Service has today upgraded the long-term deposit ratings of six Greek banks that it rates (Alpha Bank SA, Attica Bank SA, Eurobank SA, National Bank of Greece SA, Pancreta Bank SA, and Piraeus Bank SA), by either one or two notches, as well as the stand-alone Baseline Credit Assessment (BCA) of those banks.
The outlook for the long-term deposit ratings for all six banks is positive following their rating upgrades.
The rating action was driven by structural improvements in the Greek economy, as well as significant enhancements in banks’ financial fundamentals.
It also captures the rating agency’s view of the good prospects for Greek banks to sustain their relatively strong financial performance in the next two years, which will also enhance their tangible capital base and loss-absorbing capacity.
The principal rating driver is the better operating and credit conditions in Greece, providing a more supportive operating environment for the country’s banks.
Last week Moody’s gave Greece’s economy a significant vote of confidence by raising the country’s credit rating by two notches.
Moody’s said it was upgrading Greece’s rating from Ba3 to Ba1, with a stable outlook. It stopped just short of returning the formerly struggling country to formal financial respectability.
Moody’s said the government’s parliamentary majority following June elections “provides a high degree of political and policy certainty for the coming four years, fostering the ongoing implementation of past reforms and the design of further structural reforms.”
It said it expects Greece’s GDP to grow an average 2.2% annually in 2023-27 driven by investment and consumption, a “very significant improvement” compared to average growth of 0.8% in the five years before the pandemic.
It said Greece’s debt will likely fall to close to 150% of GDP as early as 2024 due to stronger GDP growth than projected earlier.