Fitch Ratings has upgraded National Bank of Greece S.A.’s (NBG) Long-Term Issuer Default Rating (IDR) to ‘B-‘ from ‘CCC+’ and Viability Rating (VR) to ‘b-‘ from ‘ccc+’.
The Outlook on the Long-Term IDR is Positive.
Fitch has also upgraded NBG’s long-term senior preferred (SP) debt rating by one notch to ‘CCC’ from ‘CCC-‘ following the upgrade of the bank’s Long-Term IDR.
The rating actions reflect NBG’s improved asset quality and capital encumbrance from unreserved impaired loans following the major off-loading of impaired loans from its balance sheet and our expectation that the bank will continue its de-risking strategy.
The rating actions are taken as part of a peer review of the Greek banks.
The Positive Outlook reflects Fitch’s expectations of additional improvements in NBG’s credit profile driven by an acceleration of its asset-quality clean-up in 2021 and 2022 while maintaining stable capital ratios.
Fitch has upgraded the bank’s funding and liquidity score to ‘b’ as its funding and liquidity continued strengthening in 2020, supported by deposit inflows, the ECB’s supportive measures and improved market access.
Customer deposits have increased sharply in 2020 while the bank maintained a liquidity coverage ratio (220% at end-2020) above that of the domestic sector.