Moody’s: Vote of confidence in Greek banks

Moody's maintains a positive outlook for the Greek banking system despite difficult economic conditions and inflationary pressures, which are likely to limit economic growth in 2022, but with a possible recovery in 2023.

According to a report by the international rating agency, banks are still able to fully implement the plans to reduce their exposure to non-performing loans, which will further improve the quality of their assets.

THE ENTIRE REPORT

The analysts of the agency

estimate that the strong corporate credit demand will continue, supporting the quality of assets and the basic profitability of Greek banks, while the need for loan loss forecasts will be significantly lower.

In addition, they stress, capital levels will stabilize as banks take on most of the losses on NPEs securitization up front in 2020-2021, while financing and liquidity will remain healthy as customer deposits increase.

"The positive outlook reflects our expectation that Greek banks will continue to improve their asset quality and profitability despite financial challenges, with stable capital and liquidity," the house said.

The picture of the economy

Moody's estimates that growth in Greece this year will reach 3% and in 2023 at 4.3%, arguing that the operating environment for banks will be difficult, but economic growth and credit demand will remain strong. He also points out that the important funds of the EU. through the Recovery Fund will help increase credit flows and mitigate risks over the next 12-18 months.

The quality of loans will be further improved

The same report states that Greek banks have significantly reduced NPEs in 2021, mainly through securitizations, and plan to continue this practice in 2022 with the ...