Fitch upgraded four Greek systemic banks, giving all of them a positive outlook.  According to ΒnB Daily, the agency upgraded the long-term ratings of National Bank and Eurobank to 'BB+', from 'BB' previously, with positive outlooks for both banks. At the same time, Fitch upgraded the long-term ratings of Alpha Bank and Piraeus Bank to 'BB', from 'BB-' previously, giving positive outlooks for them as well. 

THE REASONS FOR THE MOVE

As stated in Fitch's report, the agency notes that it made this move for the following reasons:

• The first reason is that the upgrade reflects Fitch's improved assessment of Greece's operating environment (OE) at 'BB+.'
• The analysts believe that the Greek economy will continue to outperform the Eurozone average growth rate, adding that this, combined with falling unemployment and the development of the Recovery and Resilience Fund, should support banks' ability to exploit profitable business opportunities
• Analysts point out that there are improvements in the credit profiles of National Bank, Eurobank, Alpha Bank and Piraeus
• Fitch highlights that banks' problem assets and non-performing exposures (NPEs) are declining
• The report says banks are recording healthy profitability, accumulating capital and growing
• The agency notes that the positive outlook for all systemic banks reflects Fitch's expectation that its assessment of the operating environment could improve further if positive macroeconomic trends continue and lead to satisfactory business opportunities for banks

EUROBANK

Eurobank's ratings reflect adequate asset quality, capitalisation and profitability. The ratings also reflect a strong position in the domestic market but also its diversification with expansion into the international market, solid deposit-based funding and adequate access to the debt market. Fitch also expects business opportunities for this bank in the context of growth of the economy. Eurobank's business profile is underpinned by its strong operations in Greece and its significant presence in Bulgaria and Cyprus.

NATIONAL BANK

As regards ΝΒG, it has strong market shares in retail and commercial banking. "Our assessment also takes into account the bank's focus on traditional commercial-banking activities," it said, acknowledging good assets and sustainable profitability. National Bank's profitability has stabilised. The bank's operating profit/RWA ratio was high at 4.7% in H1 2024 (2023: 4.0%) and is expected to remain healthy over the medium term, despite lower interest rates offset by rising fee-income, continued loan expansion, constrained management costs and continued reductions in repayments.

BANK OF PIRAEUS

For Piraeus Bank, the rating agency cites improved capital and earnings due to higher interest rates and the successful restructuring of sufficient capital available to the bank. Asset quality metrics are improved. High profitability and stable and large deposit-based funding are strong rating points.

ALPHA BANK

With regard to Alpha Bank, the assessment reflects that the group is one of the four systemically important banks in Greece. Capitalization has improved but remains exposed to risks arising from the bank's above-average exposure to distressed assets. Alpha's sound deposit-based funding and improved profitability support the ratings.