Moody’s said that the divestment of the HFSF’s shares in Greek banks will be credit positive for the banking sector and the local economy. The targeted repurchase of Eurobank shares for 93.7 million euros on October 9, is the first step in the divestment of HFSF’s shares in the banking sector.

Still, Moody’s has a word of caution: the sale of the HFSF shares to National Bank and Piraeus Bank could be more difficult than the Eurobank transaction, because it has significantly higher holdings (40.4% and 27%, respectively), while its stake in Alpha Bank (9%) would be easier to divest.

However, Moody’s argues that the HFSF favors strategic investors for these important equity stakes, such as internationally recognized financial institutions and long-term investment funds – including any credible existing shareholders – that could help improve the banks’ ability to adapt and deal with new market challenges.

The four banks’ improving asset quality, reduced non-performing exposures (NPEs) and increased NPE provisions in recent years, combined with recent improvements in recurring earnings and bottom line profitability will help the HFSF implement its divestment strategy , according to Moody’s.

Although the HFSF accumulated fair value losses of 38.6 billion euros in September 2022, Moody’s estimates that it could recover 3-4 billion euros based on current share valuations, reducing the bank’s overall recapitalization and stabilization costs government system.