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Moody’s upgrades Eurobank thanks to its operations abroad

Moody’s upgraded Eurobank’s rating by two notches to Baa2 from Ba1.

As a result, the bank’s Senior Preferred issues are now rated Baa2, i.e. one notch above investment grade. The rating agency Moody’s is estimated to gradually release a report for all banks.

The distribution of dividends counts significantly in the assessment for the Greek banks carried out by the rating agencies.
In this particular case, however, Moody’s took into account the presence of Eurobank abroad since this differentiates the sources of the bank’s profits.

Moody’s upgraded Eurobank based on the following criteria:

  • The strongest financial fundamentals, driven by strong earnings and a proven ability to raise core capital over the last quarters.
  • The strongest asset quality and liquidity of the bank

The fact that Eurobank’s profits also come from abroad, especially after the acquisition of a majority stake in Hellenic Bank.
According to Moody’s report, the bank can be proud of its (CET1) ratio which reached 17.2% as of March 2024 (including the 2023 dividend distribution).

The bank’s equity capital ratio (TCE) to weighted assets (RWAs) increased to 14.7% in 2023 from 11.7% in 2022.

Strong asset quality

The bank’s solvency is further supported by stronger asset quality as it managed to narrow its non-performing exposures (NPE) to gross loans ratio to 3% in March 2024 from 5.1% in March 2023.

Core earnings before provisions rose 16.5% year-on-year in the first quarter of 2024 and 58.6% in 2023 on the back of rising net interest income, fees and good cost management.

Book value stood at 19.9% in the first quarter of 2024.

The liquidity coverage ratio (LCR) reached 179% in March 2024.