Moody’s on Monday upgraded the Baseline Credit Assessment (BCA) for two Greek bank institutions, the National Bank of Greece (NBG) and Piraeus Banks, specifically raising Piraeus’ rating to ba2 from ba3, and NBG’s to ba1 from ba2.
Moody’s also upgraded its long-term and short-term deposit ratings for both ATHEX-listed Greek lenders, two of the four systemic banks in the country.
In NBG’s case, the rating agency said the BCA upgrade reflects the improving solvency of the Greek bank and the strongest funding and deposit franchise among local peers.
Its outlook was changed to stable from positive, reflecting its constrained BCA at the Greek government’s rating (Ba1 stable). Further improvements in the bank’s asset quality and profitability, maintaining comfortable capital metrics, could lead to an upgrade, Moody’s stated.
In regards to Piraeus Bank, Moody’s upgraded its long- and short-term deposit ratings to Baa3/P-3 from Ba1/NP, its long-term senior unsecured rating by two notches to Baa3 from Ba2, as well as the standalone Baseline Credit Assessment (BCA) and Adjusted BCA of the bank to ba2 from ba3. The outlook on the long-term deposit ratings remains positive.
The BCA upgrade was driven by stronger financial fundamentals and expectations for more improvements going forward, Moody’s said.
The deposit and senior debt ratings could be upgraded if there is any further improvement in the bank’s tangible capital metrics and asset quality, while it maintains solid profitability and complies with its MREL requirements. These trends will improve its solvency and loss-absorbing capacity.
Meanwhile, recently global credit rating agency Morningstar DBRS upgraded its estimation for Greek economic growth for 2024 to 1.6% in its analysis reflecting the country’s steady economic recovery.
