The new development came after the upgrade on Friday of the credit rating of the Greek economy
Today, Fitch upgraded the credit rating of three Greek banks – Eurobank, National Bank and Alpha Bank – after upgrading the credit rating of the Greek economy to “BB+” with a stable outlook on Friday, one step below the investment.
The credit rating agency upgraded Eurobank and Ethniki Bank to “BB-” from “B+” and Alpha Bank to “B+” from “B”.
As reasons for the upgrades, Fitch cited the improvement of banks’ capital position and profitability and the expected resilience of the Greek economy in 2023.
In particular, for Eurobank it notes that its upgrade reflects structural improvements in its profitability as a result of successful restructuring and risk management, which is supported by rising interest rates and economic growth in Greece.
“Cushions for required capital have strengthened and we expect domestic capital formation to continue to support the ratios,” notes Fitch.
“The upgrade also reflects an improvement in the stability and diversification of Eurobank’s funding sources following steady deposit growth and recent debt issuances. The expected resilience of the Greek economy in 2023, despite the existing uncertainty, further supports the upgrade,” added the house.
Similar to Eurobank is the rationale for NBG’s upgrade, with Fitch noting that it reflects structural improvements in its profitability as a consequence of its risk management and restructuring, boosted by rising interest rates and economic growth in GREECE.
Cushions, in addition to capital requirements, have increased “and we expect internal capital formation to continue to increase,” Fitch notes, adding that “the upgrade also reflects improved funding and liquidity profiles due to steady deposit growth and recent debt issues. The resilience of the Greek economy in 2023, despite the remaining uncertainty, further supports the upgrade”.
For Alpha Bank, Fitch notes its stronger capital position as a result of structurally improved profitability, expected capital accumulation and reduced capital weight from non-provisioned non-performing assets.
This is a result of Alpha’s progress in reducing its non-performing exposures through sales and securitizations as well as organically.
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