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S&P gets down four Greek banks present in Romania to «extremely speculative»

The evaluation agency Standard&Poor's got down the ratings for Greek banks National Bank of Greece (NBG), EFG Eurobank (EFG), Alpha Bank and Piraeus Bank with acitivities in Romania by three steps, to « CCC » the « extremely speculative » category, after a similar decision regarding Greece.

The ratings for long term credits were dropped from « B » ( high speculative) to « CCC » with negative perspective, according to a press release of S&P. This perspective reflects the possibility for the banks to be downgraded again, if the agency considers it is possible for the institutions to get to default.

The « CCC » is right above the default category with reduced perspectives for recovery ( « CCC » to « C ») and four steps above the rating « D », the last on the evaluation scale of S&P, attributed in situation of default.At the same time, the ratings for short term credits were confirmed at « C » and the for hybrid financial instruments at « CCC-« The agency considers that the financial situation of the four banks is exposed to significant risks due to the deterioration of Greece trustworthiness and the perception regarding a possible restructuring of the state debt.

S&P reduced by three steps the rating of Greece for long term credits, from « B » to « CCC », the weakest rating in the world, the agency reiterating the warning that any restructuring of the debt will be interpreted as default.

NBG, EFG, Alpha Bank and Piraeus Bank downgrading reflects the S&P opinion regarding the high risks for the financial situation of the banks, especially as regards liquidity from retail on the Greek market, as well as the capital situation. The four banks have pressure risks for short term for the financing through retail in Greece, as the population takes into consideration the need of the Greek state for a new financial foreign help and the conditions where it could be given. According to the available information at present, these conditions could be included in a possible restructuring of the public debt, which could lead to one or several default, the press release says.

The banks are directly exposed to deterioration of Greece's trustworthiness through big portfolios of governmental bonds, representing 200% of the capital reserves at NBG and Piraeus, 170% at EFG and 80% at Alpha Bank ( at the end of last year). The impact of restructuring of the debt on the rate of capital adjustment at these banks would depend greatly on the terms of restructuring and the possible regulations, even if no decision has been reached, such a measure could, in worst scenarios, to lead the banks to insolvency, the S&P analysts consider.

The perspective of the ratings of the four institutions analysed could go up to stable, if the financial situation improves or the banks benefit from support programmes to allow them to overcome the events without getting into default. EFG and NBG are present in Romania through Bancpost, Banca Romaneasca and Alpha Bank and Piraeus Bank activate on the domestic market under their own brand.

Sursa: http://www.actmedia.eu

Tags: laquo situation default financial restructuring could raquo greek present romania speculative greece banks