March 20, 2012 / 2:17 PM / 5 years ago

TEXT-Fitch affirms 4 Greek banks at 'B-'/stable

March 20 - Fitch Ratings has affirmed National Bank of Greece's 
(NBG), Alpha Bank's (Alpha), EFG Eurobank Ergasias' 
(Eurobank) and Piraeus Bank's (Piraeus) Long-term Issuer Default
Ratings (IDR) at 'B-' and removed them from Rating Watch Negative (RWN). The
Outlook is Stable. Agricultural Bank of Greece's (ATEbank) Long-term IDR of 'B-'
has been maintained on RWN to reflect uncertainties about its viability. All
five bank's Viability Ratings (VR) has been affirmed at 'f'. A full list of
rating actions is at the end of this comment.	
	
These rating actions follow the upgrade of Greece's sovereign rating to 'B-'
from 'Restricted Default' (see "Fitch Upgrades Greece to 'B-'/Stable from
'Restricted Default' dated March 13, 2012 on www.fitchratings.com) and Fitch's
revised judgement of external support for Greek banks' recapitalisation
following the new private sector involvement (PSI Plus) debt exchange agreed in
early March 2012.	
	
NBG's, Alpha's, Eurobank's and Piraeus' Long-term IDRs are on their Support
Rating Floors (SRF) and reflect Fitch's assumption that support from the IMF/EU
in respect of Greek banks' recapitalisation is committed and ensured after
Greece's debt restructuring and on the basis that they are viewed as viable
banks. An official statement made by EU/IMF and ECB in its discussion paper on
the second economic adjustment programme for Greece published in March 2012 lead
Fitch to reach this conclusion.	
	
Fitch also believes the Bank of Greece and the ECB will continue to provide
emergency liquidity assistance in a timely manner, as evidenced in the past
weeks when Greece was downgraded to 'RD' and Greek government bonds (GGB) lost
their eligibility for ECB funding.	
	
ATEbank's Long-term IDR of 'B-' is also on its SRF reflecting external support
in the form of capital (as evidenced by state capital injections in the past)
and liquidity from the ECB and the Bank of Greece. However, ATEbank's viability
analysis is addressed separately by the authorities taking into account the
legal, operational and financial aspects. Fitch will resolve the RWN once there
are more details on the final solution, which could involve the recapitalisation
of the bank if considered viable or its resolution. The latter could entail the
full or partial sale of the bank, a creation of a bridge bank or an orderly
winding down. The latter scenarios could constitute, in Fitch's view, an event
of default.	
	
Fitch believes that the extended extraordinary capital backstop facility of
EUR50bn through the Hellenic Financial Stability Fund (HFSF) as part of the
IMF/EU support programmes is likely to prove sufficient to cover banks'
estimated losses and restore the solvency of the major Greek banks. Losses
include write-downs from the PSI Plus (which entail a 53.5% nominal value
haircut on GGB and of some state guaranteed public sector loans), credit losses
from the Blackrock exercise and costs associated with the resolution of
non-viable banks.	
	
All banks will be required to achieve a core capital ratio of 9% by
end-September 2012 and 10% by end-June 2013. Based on capital needs and capital
raising plans, the Bank of Greece will assess the viability of banks. Viable
banks will be then given time to raise capital in the market until
end-September. If banks failed to improve capital by private means, they will be
able to access capital from the HFSF through common shares and contingent
convertible bonds.	
	
At such time that Greek banks' effectively receive capital support, Fitch will
upgrade banks' VR to a rating level commensurate with its post-supported
financial strength. However, Fitch anticipates that the VR of Greek banks will
remain at a deeply sub-investment grade rating level to reflect the numerous
challenges there are faced with and their substantial weak credit fundamentals.
The latter is expressed by their fragile funding and liquidity profiles, rising
asset quality concerns and potential operating losses in the context of Greece's
distressed macroeconomic environment.	
	
The rating actions are as follows:	
	
NBG	
Long-term IDR affirmed at 'B-'; Stable Outlook, RWN removed	
Short-term IDR affirmed at 'B'; RWN removed	
Viability Rating affirmed at 'f'	
Support Rating affirmed at '5'	
Support Rating Floor affirmed at 'B-'; RWN removed	
Senior notes affirmed at 'B-/RR4'; RWN removed	
Hybrid capital affirmed at 'C'	
State-guaranteed issues affirmed at 'B-' ; RWN removed	
	
Eurobank	
Long-term IDR affirmed at 'B-'; Stable Outlook, RWN removed	
Short-term IDR affirmed at 'B'; RWN removed	
Viability Rating affirmed at 'f'	
Support Rating affirmed at '5'	
Support Rating Floor affirmed at 'B-'; RWN removed	
Senior notes affirmed at 'B-/RR4'; RWN removed	
Market-Linked Senior notes at 'B-emr'/RR4'; RWN removed	
Commercial paper affirmed at 'B'; RWN removed	
Subordinated notes affirmed at 'C'/'RR6'	
Hybrid capital affirmed at 'C'	
State-guaranteed issues affirmed at 'B-' ; RWN removed	
Short-term state-guaranteed issues affirmed at 'B', RWN removed	
	
Alpha	
Long-term IDR affirmed at 'B-'; Stable Outlook, RWN removed	
Short-term IDR affirmed at 'B'; RWN removed	
Viability Rating affirmed at 'f'	
Support Rating affirmed at '5'	
Support Rating Floor affirmed at 'B-'; RWN removed	
Senior notes affirmed at 'B-'/'RR4'; RWN removed	
Market-Linked Senior notes affirmed at 'B-emr'/'RR4'; RWN removed	
Subordinated notes affirmed at 'C'/'RR6'	
Junior subordinated notes affirmed at 'C'	
Hybrid capital affirmed at 'C'	
State-guaranteed issues affirmed at 'B-'; RWN removed	
Short-term state-guaranteed issues affirmed at 'B', RWN removed	
Commercial paper programme affirmed at 'B', RWN removed	
	
Piraeus	
Long-term IDR affirmed at 'B-'; Stable Outlook, RWN removed	
Short-term IDR affirmed at 'B'; RWN removed	
Viability Rating affirmed at 'f'	
Support Rating affirmed at '5'	
Support Rating Floor affirmed at 'B-'; RWN removed	
Senior notes affirmed at 'B-'/'RR4'; RWN removed	
Commercial paper affirmed at 'B'; RWN removed	
State-guaranteed issues affirmed at 'B-'; RWN removed	
	
ATEbank	
Long-term IDR at 'B-'; RWN maintained	
Short-term IDR at 'B'; RWN maintained	
Viability Rating affirmed at 'f'	
Support Rating affirmed at '5'	
Support Rating Floor at 'B-'; RWN maintained	
State-guaranteed issues affirmed at 'B-'; RWN removed	
	
The rating impact, if any, from the above rating actions on Greek banks'
subsidiaries, securitisation transactions and covered bonds will be detailed in
separate comments.	
	
In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's VR
and the prospect of external support is reflected in Fitch's Support Ratings.
Collectively these ratings drive Fitch's Long- and Short-term IDRs.	
	
Contact:	
	
Primary Analyst	
Cristina Torrella	
Senior Director	
+34 93 323 8405	
Fitch Ratings Espana, S.A.U.	
Paseo de Gracia, 85, 7th Floor	
08008 Barcelona	
	
Secondary Analyst	
Josep Colomer	
Director	
+34 93 323 8416	
	
Committee Chairperson:	
Maria Jose Lockerbie	
Managing Director	
+44 203 530 1083	
	
Media Relations: Michelle James, London, Tel: +44 0203 530 1574, Email:
Michelle.James@fitchratings.com.	
	
Additional information is available at www.fitchratings.com.	
	
The ratings above were solicited by, or on behalf of, the issuer, and therefore,
Fitch has been compensated for the provision of the ratings.	
	
Applicable criteria, 'Global Financial Institutions Rating Criteria', dated 16
August 2011, 'Rating Bank Regulatory Capital and Similar Securities', dated 15
December 2011 and 'Recovery Rating For Financial Institutions", dated December
2009 are available at www.fitchratings.com.	
	
Applicable Criteria and Related Research:	
Global Financial Institutions Rating Criteria	
Rating Bank Regulatory Capital and Similar Securities	
Recovery Ratings for Financial Institutions

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