Moody’s on Monday raised the outlook for the National Bank of Greece and Eurobank, two of the four systemic banks in the country, to positive from stable, days after doing the same for the country’s outlook while maintaining the sovereign credit rating one notch below “investment grade” at Ba1.
Moody’s upgraded the outlook for the Baa2 credit rating of the long-term deposits and high-grade senior unsecured debt of both Greek lenders to positive.
Moody’s said the decision reflected the view that the baseline rating of the two banks (ba1) is constrained by Greece’s credit rating (Ba1) due to their significant exposure to government T-bills and bonds. The banks’ credit rating was unchanged.
Moody’s cited two reasons for the outlook upgrade vis-a-vis NBG, namely, a robust performance and improvement of key figures over the past few years, such as an 18% annual increase in primary revenues before provisions (June 2024).
In qualifying its upgrade of Eurobank’s outlook – but maintaining the credit rating at Ba1 – Moody’s cites strong financial performances over the past few years and a geographically diversified asset base and its earnings.
Eurobank was able to achieve a return on tangible book value of 18.5% in the first half of 2024 and a cost-to-core ratio of 32.3%, while the bank’s strong credit profile was reflected in its overall capital adequacy ratio, which reached 19.3%.
