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Fitch Ratings has raised Hellenic Bank’s (HB) support rating from ‘bb-’ to ‘bb’, thanks to a similar boost for Eurobank S.A., which owns a majority stake in HB. This change reflects Eurobank’s growing role and influence over HB.
Eurobank, which now holds 56% of HB, has recently started to consolidate HB’s financials into its own, significantly increasing its total assets. Although this consolidation will help boost Eurobank’s assets by about 22% to nearly EUR100 billion, HB’s support rating is still a notch lower than Eurobank’s rating. This is because Eurobank’s ability to support HB fully may be limited until it either raises its stake to over 75% or successfully integrates HB into its operations.
Eurobank is set to become more involved with HB by replacing some of its board members and appointing a new CEO, aiming for closer cooperation and better results. However, Fitch warns that if Eurobank’s own rating drops or if it struggles to increase its stake and merge with HB, HB’s support rating could also go down.
On the flip side, if Eurobank’s rating improves or it shows a stronger commitment to supporting HB, the bank’s support rating could go up. This would likely happen if Eurobank increases its stake, integrates HB more thoroughly, or realizes significant benefits from the merger.
[With information from CNA]
