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Eurobank’s percentage in Hellenic Bank to affect its rating

Eurobank recently acquired a higher stake in Hellenic Bank, but the impact of this move on the credit rating will not be clear for both banks until the closing of the transactions and the completion of the upcoming public offering, Fitch Ratings said.

Both Eurobank and Hellenic Bank have been rated with “BB-” (stable).

The final percentage of Eurobank in Hellenic Bank, as well as the capital impact of the transaction, are still unknown.

Eurobank already owns 29.2% of Hellenic Bank. The move is part of the group’s intention to acquire a majority percentage in the Cypriot financial institution in the framework of its strategy to consolidate its presence in key foreign markets, such as Cyprus.

Fitch sees highly likely that Eurobank will acquire a majority percentage in Hellenic Bank after the completion of the mandatory public offering.

“The acquisition would marginally improve Eurobank’s asset quality, as its non-performing exposures (NPEs) ratio of 5.9% at end-June 2023 was higher than Hellenic Bank’s 3.4% at end-March 2023. However, A reduced NPEs ratio as a result of the acquisition is unlikely to be significant enough to change our assessment of the asset quality,” the statement said.

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