Increasing its Basic Credit Rating (BCA). Eurobank Moody’s downgraded from ba2 to ba1.
At the same time, it upgraded Eurobank’s long-term and short-term deposit ratings from Baa3/P-3 to Baa2/P-2, and raised its long-term non-secured bond rating by two notches to Baa2. From Ba1.
Moody’s also revised the rating outlook for Eurobank from “positive” to “stable”.
According to Moody’s, Eurobank’s BCA upgrade with stronger foundations and improved bank solvency.
In particular, the house reports that Eurobank’s BCA has been upgraded from ba2 to ba1 due to its strong profit generation and proven ability to increase its core capital in recent quarters, significantly strengthening its ability to absorb losses.
The bank reportedly had a proforma CET1 ratio of 17.2% as of March 2024.
Bank solvency is further supported by stronger asset quality.
Upgrading a bank’s BCA also takes into account its liquidity.
What does Hellenic Bank of Cyprus say?
As for the increase in the interest owned by Hellenic Cyprus Bank, Moody’s notes that this move further supports Eurobank’s credit profile.
In particular, as noted, Eurobank has the most diversified profit streams of Greek banks, both geographically and in terms of areas of activity, which works positively on its credit profile.
The recently announced completion of the majority stake acquisition (55.5% stake) in Hellenic Bank further strengthens the group’s geographic diversification.
It is also noted that the possible further improvement of the macroeconomic environment in Greece may lead to an increase in the country’s creditworthiness and greater profitability of the Greek bank.
