Fitch upgrades BOCY and Hellenic Bank
Fitch Ratings House announced that the credit rating of Bank of Cyprus has been upgraded from “CC” to “CCC” and Hellenic Bank from “CCC” to “B-,”with a stable Outlook.
At the same time, Fitch has upgraded Bank of Cyprus’ Viability Rating from “cc” to “ccc” and Hellenic Bank’s from “ccc” to “b-”. Hellenic Bank’s short-term assessment updated from “C” to “B”.
The rating house also noted that the upgrades mainly reflect the improved capital buffers that led to gradual relaxation of capital controls, with authorities to proceed to full control deregulation in early April.
The recent developments in Bank of Cyprus indicate positive signs of progress that are due to assets’ deleveraging, an act that allows the reduction of its dependency on Central Bank’s financing, the firm adds.
However, Fitch highlights that the ratings remain below the investment grade (sub-investment grade), reflecting a significant risk of failure, mainly due to weak loans and the high imbalances in funding, especially in Bank of Cyprus case.
Source: In Business