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12° Nicosia,
15 July, 2024
 

Cyprus banks receive upgrades, signal economic resilience

Fitch ratings elevates Bank of Cyprus and Hellenic Bank, underscoring financial sector strength

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In a series of significant upgrades for Cypriot banks, Fitch Ratings has elevated the Bank of Cyprus and Hellenic Bank's credit ratings, underscoring a positive trajectory for the country's financial sector, according to a report by Panayiotis Rougalas in this Sunday's Kathimerini.

Fitch upgraded the Bank of Cyprus' long-term issuer default rating (IDR) to 'BB+' from 'BB', with a 'positive' outlook, indicating the potential for further improvement in the near future. The viability rating (VR) was also raised to 'bb+' from 'bb', reflecting strengthened asset quality and capitalization. Fitch noted that sustained improvements in non-performing assets and robust capital ratios could lead to an eventual investment grade status.

Similarly, Hellenic Bank saw its long-term IDR upgraded to 'BBB-' from 'BB+', with a stable outlook. Fitch highlighted Eurobank's increased stake in Hellenic Bank as a key factor in its rating decision, noting enhanced support and potential synergies between the two entities. The ratings agency emphasized Hellenic Bank's strong retail deposit base and liquidity, factors contributing to a healthy loan-to-deposit ratio and solid capitalization.

These upgrades follow Moody's recent elevation of Eurobank and Alpha Bank to investment grade, despite Greece not receiving the same status. Moody's highlighted Eurobank's diversified earnings and strategic acquisition of a majority stake in Hellenic Bank, bolstering geographic diversification and operational resilience. These developments signify a positive outlook for Cyprus' banking sector, enhancing investor confidence and signaling economic stability amid broader financial challenges in the region.

[This is a summary of an article written by Panayiotis Rougalas in Kathimerini's Sunday edition.  Subscribe now]

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Cyprus  |  banks  |  economy

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