Moody’s sees local banks staying robust

Rating agency Moody’s highlighted in a report on Wednesday the five factors that support the positive outlook of Greek banks. This sent an important message to investors about their resilience in the midst of the continuing market nervousness regarding the banking industry internationally.

The Greek banking sector’s defenses are based on favorable economic conditions, the stabilization of loan quality, their improved profitability, stable capital position and strong liquidity and funding position.

Moody’s explained the environment will be favorable in 2023-24, with economic and credit growth in Greece remaining higher than other EU countries. It added that Greek banks have significantly reduced nonperforming exposures in recent years, with loan quality expected to stabilize.

Moody’s also believes that Greek banks’ profitability will be supported by the higher lending margins and the increase in corporate loans, capital levels will remain intact, and the funding and liquidity positions of Greek banks will remain healthy as customer deposits increase and Greek banks continue to tap into the Minimum Equity and Eligible Liabilities (MREL) markets.