Cyprus Mail

Moody’s upgrades BoC, Hellenic one notch

Moody’s Investors Service on Wednesday upgraded, by one notch, the long term local and foreign currency deposit ratings of Bank of Cyprus to Caa2, and Hellenic Bank to Caa1, and affirmed their not-prime short-term local and foreign currency deposit and commercial paper ratings.

Moody’s said its action was driven by an improved operating environment, which in turn allowed the banks’ profitability, asset quality, funding, and capitalisation to improve.

This was also the case for Cyprus’s “macro profile” assessment, which rose to weak from very weak.

Moody’s said that it expects Bank of Cyprus to fully repay its outstanding emergency central bank funding, which according to the bank’s top executive John Hourican stood at €0.4m on Tuesday, “in the coming quarters”.

“Moody’s notes that the ratings of these two banks remain at low levels, reflecting, in particular, the vulnerability of their capital buffers to the high stock of non-performing loans,” the rating company said in an emailed statement.

The long-term Caa1 deposit rating for Hellenic also incorporates “one notch of uplift from the bank’s caa2 baseline credit assessment,” Moody’s said.

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