CI upgrades Hellenic Bank ratings, outlook revised to stable from positive

Capital Intelligence Ratings upgraded on 13 December Hellenic Bank's Long-Term Foreign Currency Rating (LT FCR) to 'BBB-' (from 'BB') and its Short-Term Foreign Currency Rating (ST FCR) to 'A3' (from 'B').

At the same time, CI Ratings has upgraded HB's Bank Standalone Rating (BSR) to 'bbb-' from 'bb' and raised its Core Financial Strength (CFS) rating to 'bbb' from 'bb+'. The ESL of Uncertain has been affirmed. The Outlook for both the LT FCR and BSR is revised to Stable from Positive.

According to the rating agency, the two-notch upgrade of the Bank's LT FCR and and BSR is driven by both the improved CFS rating of 'bbb' and the higher Operating Environment Risk Anchor (OPERA) assessment of 'bb+.

The CFS reflects the Bank's enhanced asset quality and capitalisation metrics, alongside significantly strengthened capacity to absorb potential future shocks. These gains are also supported by stronger profitability, high liquidity, and a stable, diversified funding base in HB's domestic market.

As noted, the ratings could be upgraded if there are improvements in the Bank's asset quality and capitalisation or in the quality of earnings, or if early realisation of substantial benefits following its merger with Eurobank Cyprus are substantial enough to warrant raising its CFS, and our OPERA assessment is concurrently increased by one notch.

Although unlikely, the Outlook on the Bank's LT FCR or BSR could be revised to Negative (or the ratings lowered) if the Bank's financial metrics weaken considerably or our OPERA is revised downwards.