According to the Cyprus Mail, the international rating agency Moody's has upgraded the outlook for three major domestic banks in Cyprus: Bank of Cyprus (BOC), Hellenic Bank, and RCB Bank. Specifically, the outlook for the Bank of Cyprus has been upgraded from negative to positive, with its long-term deposit rating maintained at Ca, and its senior unsecured medium-term note program rating upgraded from (P)C to (P)Ca. The outlook for Hellenic Bank has been upgraded from negative to positive, with its long-term deposit rating remaining unchanged at Caa3. The outlook for RCB Bank has been upgraded from negative to stable, with its long-term deposit rating remaining unchanged at Caa2.
The upgrade in the outlook for the Bank of Cyprus follows the credit rating adjustment of the Cypriot government's sovereign bonds, reflecting the potential for the bank to receive greater government support in the future. Hellenic Bank successfully completed a capital replenishment last November without government assistance, and this outlook upgrade reflects an improvement in the bank's capital position. The credit rating adjustment for RCB Bank reflects the high risk it continues to face regarding an increasing funding gap, as factors such as the weak domestic economic environment, high unemployment, and adjustments in real estate prices will further contribute to the growth of non-performing loans for the bank.
Source: Economic and Commercial Counselor's Office in Cyprus
