Moody's raised Hellenic Bank's rating from Baa2 to Baa1 and changed the outlook from positive to stable.
In addition, the bank's base credit assessment (BCA) was raised from ba1 to baa3, the adjusted BCA - from ba1 to baa3, the senior unsecured debt rating - from Ba1 to Baa3, the long-term counterparty risk (CR) rating - from Baa1(cr) to A3(cr), the long-term counterparty risk ratings (CRR) - from Baa1 to A3, the subordinated debt rating - from Ba2 to Ba1, the short-term deposit ratings and the CRR were affirmed at the same level.
The main reasons for the rating upgrades include:
- Financial strength - Moody's expects Hellenic Bank to maintain its improved financial performance, which was a key factor in the rating upgrade.
- Support from Eurobank S.A. - Eurobank S.A.'s recent rating upgrade indicates a greater ability to support Hellenic Bank if needed.
- Stabilisation of asset quality - the proportion of non-performing loans (NPLs) was only 2.4% as of December 2024, of which the percentage is guaranteed by the government.
- Profitability growth - the bank's net profit remains at 2.1% of assets in 2024 (vs. 1.8% in 2023).
- Capital strengthening - the CET1 ratio increases from 22.8% in 2023 to 28.7% in 2024.
- Efficient funding structure - the bank relies on retail deposits to ensure low cost of funds.
The upgrade of Hellenic Bank's ratings reflects the bank's financial strength, improved asset quality and strong capitalisation. Moody's expects the bank to continue to strengthen its position in the Cypriot financial sector and maintain stable growth rates.