Fitch: Hellenic, BoC retain Positive Outlook

The ratings of Cyprus’ two largest banks continue to have a Positive Outlook despite increased risks to the global economy due to the war in Ukraine, Fitch Ratings said on Tuesday.

“We still expect Hellenic Bank (HB, B/Positive) and Bank of Cyprus (BoC, B-/Positive) to progress with their planned disposals and securitizations of impaired loans, an expectation that underpins the Positive Outlooks,” the rating agency said in a statement.

Fitch recently lowered its gross domestic product growth forecast for Cyprus this year to 3.1% from 3.7%.

“Slower growth and uncertainty about the path of inflation should not significantly disrupt the banks’ positive credit trajectories, as deals involving asset disposals are advancing. We expect both banks to complete the large impaired loan disposals already in their pipelines for this year,” argued Fitch.

It added that the Cypriot banks’ deposits from Russian clients are not large enough to represent a liquidity risk.