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Moodys Downgraded Eight Greek Banks

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Moodys Investors Service said on Friday it downgraded the long-term deposit and senior debt ratings of eight rated Greek banks by two notches.

National Bank of Greece, EFG Eurobank Ergasias, Alpha Bank, Piraeus Bank, ATEbank and Attica Bank downgraded to Caa2 from B3, while Emporiki Bank and Geniki Bank downgraded to B3 from B1. All of the banks long-term deposit and debt ratings carry a negative outlook.

According to a statement, the main factors driving the rating actions on domestically owned Greek banks are as follows: 

(1) The impact of recent impairments of Greek government bonds, and the increasing risk of significant additional impairments of GGBs, on banks capital levels. 

(2) The expected impact of the deteriorating domestic economic environment on non-performing loans and potential additional provisioning costs from the upcoming diagnostic asset quality study, initiated by BoG and to be conducted by external consultants (BlackRock). 

(3) Declines in deposit bases and still fragile liquidity positions, as illustrated by limited remaining eligible collateral for funding from the European Central Bank (ECB) and the recent activation of Emergency Liquidity Assistance (ELA) by the Bank of Greece (BoG).

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