Moody’s has upgraded the credit ratings of three Greek banks—Eurobank, National Bank of Greece (NBG), and Attica Bank—following its recent upgrade of Greece’s sovereign credit rating to investment grade last week.

The credit ratings agency raised the Baseline Credit Assessment (BCA) of Eurobank and NBG to baa3 from ba1, while Attica Bank’s BCA was upgraded to b1 from b2.

In addition, the long-term deposit and senior unsecured debt ratings of Eurobank and NBG were upgraded to Baa1 from Baa2, with stable outlooks.

Attica Bank’s corresponding ratings were upgraded to Ba2 from B1, with its outlook remaining positive.

Eurobank’s upgrade

Moody’s attributed Eurobank’s BCA upgrade to Greece’s sovereign rating upgrade (to Baa3 with a stable outlook from Ba1 with a positive outlook), which had previously constrained the bank’s independent credit profile.

The upgrade is also supported by Eurobank’s strong and diversified earnings capacity, combined with improvements in asset quality.

According to Moody’s, Eurobank achieved a return on tangible common equity of 18.5 per cent in 2024.

The bank generated net earnings of approximately €709 million from its operations in Southeast Europe, including Cyprus and Bulgaria, which accounted for nearly 48 per cent of the group’s total net income.

The agency highlighted that Eurobank’s geographically diversified earnings distinguish it from other Greek banks, contributing to a stronger financial profile.

This diversification helps insulate the bank from potential economic instability in Greece.

National Bank of Greece’s upgrade

NBG’s credit rating was upgraded to baa3 from ba1 after Greece’s sovereign rating was elevated to investment grade (Baa3 from Ba1).

The bank’s independent credit profile was previously constrained by the country’s sovereign rating due to its substantial exposure to Greek government securities.

Moody’s noted that NBG had the strongest capital ratios among Greek banks, with a Common Equity Tier 1 (CET1) capital ratio of 18.3 per cent in December 2024, up from 17.8 per cent in December 2023.

This solid capital position provides NBG with significant capacity for growth and the largest loss-absorption buffer among Greek banks.

The upgrade also reflects improved profitability, with NBG achieving a return on tangible equity of 17.5 per cent in 2024.

Attica Bank’s upgrade

Attica Bank’s BCA upgrade to b1 was primarily driven by the completion of its non-performing exposure (NPE) securitisation under the state-backed Hercules III asset protection scheme.

This process relieved the bank of approximately €3.7 billion in non-performing loans.

As a result, the bank’s solvency has significantly improved, paving the way for future growth and restoring market confidence in its financial health, Moody’s stated.

The agency also highlighted the high quality of Attica Bank’s new lending over the past two years, which has largely consisted of well-diversified loans to small and medium-sized enterprises and business clients across various sectors.