Specifically, Moody's upgraded the Baseline Credit Assessment (BCA) of Eurobank and the National Bank of Greece to baa3 from ba1, and of Attica Bank to b1 from b2. The long-term deposit and senior unsecured bond ratings of Eurobank and the National Bank of Greece were upgraded to Baa1 from Baa2, with stable outlooks, replacing the previous positive outlooks. For Attica Bank, the long-term rating was upgraded to Ba2 from B1, with a positive outlook maintained.
Reasons for the Upgrade of Eurobank
The upgrade of Eurobank's BCA resulted from the recent upgrade of Greece’s sovereign rating to Baa3 with a stable outlook from Ba1 with a positive outlook, which had previously constrained the bank's autonomous credit profile. This upgrade is further supported by Eurobank's strong and diversified profit-generating capacity, along with its improved asset quality.
Among other factors, Moody’s noted that Eurobank achieved a return on tangible common equity of 18.5% during 2024, incorporating a net profit contribution of approximately €709 million (about 48% of the group’s net profit) from its Southeastern European operations, including Cyprus and Bulgaria. The geographical diversification of the bank's profits, distinguishing it from other Greek banks, is a key factor behind its stronger financial profile, as it partially shields the bank from any instability in the Greek economy, according to Moody’s.
Upgrade of the National Bank of Greece
The National Bank of Greece’s credit rating was upgraded to baa3 from ba1, following the upgrade of Greece’s sovereign rating to investment-grade (Baa3 from Ba1), as the bank’s credit profile had previously been constrained by its significant exposure to Greek government bonds.
Moody’s also highlighted NBG’s stronger capital ratios in the market, with a CET1 ratio of 18.3% as of December 2024, up from 17.8% in December 2023, providing strong growth capacity and the largest loss-absorption buffer among Greek banks. The improvement in profitability also played a role in the upgrade, with a tangible equity return of 17.5% in 2024.
Attica Bank's Improved Outlook
The upgrade of Attica Bank’s BCA to b1 is primarily due to the completion of the securitization of its non-performing exposures (NPEs) through the state-supported Hercules III asset protection scheme, which allowed the bank to reduce non-performing loans by approximately €3.7 billion.
The clean-up of NPEs has significantly strengthened the bank's solvency and paves the way for its future growth and restoration of market confidence, according to Moody’s. The upgrade also reflects the good quality of the new lending in the past two years, which mainly consisted of loans to small and medium-sized enterprises (SMEs) and business exposures that are well-diversified across various sectors.
