All four Greek systemic banks saw a series of upgrades to their investment grades this year, driven by the successive upgrades of Greece’s creditworthiness by the major international rating agencies.
It seems that the course of the Greek economy and its upgrades by multiple rating agencies led to the improvement of the investment position of all Greek banks, since they seem to have firmly left the decade of the financial crisis behind them and improved their credit profile.
Eurobank
Eurobank has received ratings from Moody’s, S&P Global Ratings, Fitch Ratings and Morningstar DBRS.
A few months ago, Moody’s upgraded Eurobank’s credit rating to “Baa1” from “Baa2”, with a stable outlook.
According to the agency, this upgrade was also due to the upgrade of Greece’s sovereign credit rating (to Baa3 stable from Ba1 positive), which previously limited the bank’s credit profile.
S&P Global Ratings announced in January the upgrade of Eurobank’s rating to BBB- from BB+, with a stable outlook, while Fitch Ratings also upgraded it to BBB- with a stable outlook from BB+ and a positive outlook a few months later. According to both rating agencies, the upgrade of the ratings results from the fact that the risks of the banking system in Greece have been mitigated, while at the same time the quality of the bank’s capital has improved.
Eurobank climbed another notch for Morningstar DBRS, after it upgraded Eurobank’s credit ratings to BBB from BBB- (low), while also changing the rating trend to positive from stable.
Piraeus Bank
Piraeus Bank has also received four ratings from the same agencies. Moody’s upgraded Piraeus Bank’s long-term issuer rating a few months ago to Baa2 from Baa3, with its outlook changing to stable.
At the same time, Piraeus Bank was upgraded to BB+ by two agencies this year: S&P Global Ratings and Fitch Ratings, with the former maintaining its stable outlook and the latter maintaining the Bank’s positive outlook. In fact, for S&P Global Ratings, the stable outlook for Piraeus Bank is based on the assessment that the bank will maintain its credit profile over the next 12-24 months, supported by positive economic growth in Greece.
Fitch Ratings, which upgraded Piraeus Bank along with Alpha Bank, stated in its assessment that “the positive outlook for Piraeus and Alpha reflects our expectations that the two banks will continue to reduce their capital burden from problematic assets.”
Finally, Morningstar DBRS upgraded Piraeus Bank’s credit rating by two notches this year, to BBB from BB+, while changing the outlook from positive to stable.
This rapid rise reflects, according to the rating agency, the strong and ongoing improvement in the bank’s (risk) profile, which results from the improvement of its credit profile and its capital “cushion”, while the rating agency expects the acquisition of Ethniki Insurance to play a decisive role in diversifying its revenues and improving its product portfolio.
National Bank
National Bank also received a series of upgrades this year, almost similar to those received by Greece from the four aforementioned rating agencies.
In particular, Moody’s earlier this year upgraded its credit rating to Baa1 from Baa2, while changing the outlook to stable from positive, reflecting the Greek government’s rating prospects (Baa3, stable), as the agency specifically noted in its assessment.
The next upgrade for NBG came from Morningstar DBRS in April, which raised the bank’s credit rating by one notch to BBB, from BBB-, with its outlook remaining stable. As the agency noted, this move reflects NBG’s improved profitability levels and further strengthens its asset quality profile, while it is in line with the agency’s upgrade of the Greek investment position to the same levels.
S&P also upgraded NBG by one notch to BBB-, for roughly the same reasons as DBRS, with a stable outlook, as the agency’s assessment is that NBG will maintain a strong credit profile over the next 12-24 months.
The latest upgrade for NBG is from Fitch Ratings, which upgraded the bank’s investment grade from BB+ with a positive outlook to BBB- with a stable outlook.
Alpha Bank
Alpha Bank saw its investment grade upgraded by Moody’s, Fitch Ratings and Scope Ratings.
The former upgraded Alpha Bank to Baa2, from Baa3, with a positive outlook. Alpha Bank received a second upgrade from Fitch Ratings, which raised its investment grade to BB+ with a positive outlook from BB with a positive outlook.
Finally, Alpha Bank received an upgrade from Scope Ratings, with its investment grade status rated BBB and its outlook stable. According to the rating agency, this assessment was based on the bank’s consistent business model, which benefits from its improved asset quality and strong capital ratios. Alpha Bank, in an announcement, informed that it had appointed Scope Ratings as a new credit rating agency, reflecting the excellent cooperation between the two.
