Moody's upgraded Hellenic Bank's rating from B1 to Ba3, citing a positive outlook and a significant improvement in the bank's asset quality following the sale of a package of non-performing loans.
Moody's also upgraded Hellenic Bank's long-term foreign and local currency deposit rating from Caa1 to B3, its long-term counterparty risk rating (CRR) from Ba3 to Ba2, its long-term counterparty risk assessment (CRA) from Ba3 (cr) to C2 (cr), and its underlying credit assessment (BCA) from b3 to b2.
The upgrade of Hellenic Bank's ratings reflects a significant improvement in the bank's asset quality following the agreement to sell its portfolio of delinquent loans," Moody's said in a statement.
It should be noted that last month Hellenic Bank announced a profit of €93.3m for the first quarter of 2024, up 34 per cent year-on-year, but down 25 per cent or €124.8m from the fourth quarter of 2023, mainly due to higher interest rates.
Among other things, the agency stressed that Hellenic Bank's rating still includes "strong deposit funding and a large amount of liquid assets".
Thus, Moody's positive outlook reflects the agency's expectation that Hellenic Bank will continue to reduce the volume of past due loans and maintain capital and liquidity reserves well above regulatory minimums. All this will provide Hellenic Bank with the opportunity to further improve its operating environment.
It is worth noting that Hellenic Bank's rating could be upgraded further if the bank makes further progress in improving asset quality, increasing profitability, and maintaining high capital and liquidity ratios.
As a reminder, Moody's Investors Service is one of the world's leading credit rating agencies that assigns credit ratings and publishes analytical research and risk analysis materials.
The company's activities, based on the highest professional standards, contribute to the transparency and integration of the capital markets. Moody's Investors Service analyses are among the most respected in the world. Moody's research and ratings cover more than 110 countries and tens of thousands of issuers.