Moody’s raises outlook for National Bank of Greece’s long-term deposits — Cyprus Mail

In Greece, Moody’s Ratings raised its outlook on National Bank of Greece’s long-term deposits from “stable” to “positive,” while affirming the bank’s long-term deposit and senior unsecured debt ratings at Baa1. This was reported by Cyprus Mail.

The decision was made after the outlook on Greece’s sovereign rating was changed from “stable” to “positive.” The country’s sovereign rating itself remained at Baa3. Moody’s also changed the outlook on National Bank of Greece’s senior unsecured debt from “negative” to “stable.”

Affirmed assessments

Moody’s affirmed the bank’s baseline credit assessment and adjusted baseline credit assessment at baa3. The agency also left unchanged the P-2 short-term deposit rating, the Baa1/P-2 counterparty risk ratings, and the Baa3 Tier 2 debt rating.

According to Moody’s, the bank’s credit profile is supported by high and stable profitability, substantial capitalization, sound asset quality and particularly strong liquidity. At the same time, National Bank of Greece’s standalone credit assessment is constrained by Greece’s sovereign rating due to the bank’s significant exposure to domestic sovereign risk.

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Financial indicators

In the first half of 2026, the bank’s annualized return on tangible capital was 15.5%, while core income increased by 3% year-on-year due to higher net fee income. Operating expenses rose by 8% over the period; Moody’s attributed part of the increase to the bank’s investments in staff, technology and digital infrastructure. The normalized cost-to-income ratio was around 35% in June.

The common equity Tier 1 (CET1) ratio stood at 17.3% in June 2026, exceeding the bank’s internal target of around 13%. The share of deferred tax credits in CET1 declined to approximately 38% from 46% a year earlier.

National Bank of Greece’s non-performing loan exposure ratio was 2.4%, with coverage of 105%. Its loan-to-deposit ratio was 67%, the liquidity coverage ratio was 227%, and the net stable funding ratio was 143%.

Conditions for a possible upgrade

Moody’s said deposit ratings could be upgraded if Greece’s rating is raised and if the bank maintains high profitability, capitalization and asset quality over the next 12–18 months. The agency cited a possible significant deterioration in loan portfolio quality or profitability, as well as a substantial weakening of capital positions, funding conditions or the operating environment, as risks to its assessment.