Moody’s upgrades National Bank, Piraeus Bank deposit ratings

Moody’s upgraded National Bank and Piraeus Bank deposit ratings on Monday.

In National Bank’s case, Moody’s upgraded its long- and short-term deposit ratings to Baa2/P-2 from Baa3/P-3, and changed its outlook on the long-term deposit ratings changes to stable from positive. The bank’s Baseline Credit Assessment (BCA) was upgraded to ba1 from ba2, while its senior unsecured debt ratings is upgraded to Baa2 from Ba1.

The BCA upgrade reflects the bank’s improving solvency and the strongest funding and deposit franchise among local peers, the ratings agency said.

Its outlook was changed to stable from positive, reflecting its constrained BCA at the Greek government’s rating (Ba1 stable). Further improvements in the bank’s asset quality and profitability, maintaining comfortable capital metrics, could lead to an upgrade, Moody’s said.

In terms of Piraeus Bank, Moody’s upgraded its long- and short-term deposit ratings to Baa3/P-3 from Ba1/NP, its long-term senior unsecured rating by two notches to Baa3 from Ba2, as well as the standalone Baseline Credit Assessment (BCA) and Adjusted BCA of the bank to ba2 from ba3. The outlook on the long-term deposit ratings remain positive. The BCA upgrade was driven by stronger financial fundamentals and expectation for more improvements going forward, Moody’s said.

The deposit and senior debt ratings could be upgraded if there is any further improvement in the bank’s tangible capital metrics and asset quality, while it maintains solid profitability and complies with its MREL requirements. These trends will improve its solvency and loss absorbing capacity.