Moody’s upgraded Greek covered bond issuers Alpha Bank, National Bank of Greece and Piraeus Bank from Caa2 to Caa1 on Friday, and improved the outlook on Eurobank Ergasias’ rating because the Greek government’s creditworthiness has improved.

Alpha Bank, Athens

The rating agency upgraded Greece’s government bond rating from C to Caa3 at the end of November and on Friday said that the upgrades of the banks to Caa1, with stable outlooks, reflect a combination of restored capital bases, reduction in the formation of non-performing loans (NPLs), overall improvement in the banks’ credit profiles, and improved funding and liquidity profiles.

“At the same time, Moody’s notes that the ratings of these and other Greek banks remain significantly constrained by the still adverse operating environment,” it said, “high – although stabilising – levels of impaired loans, ongoing losses and sovereign risk exposure.”

Moody’s changed the outlook on Eurobank Ergasias’ Caa2 rating from negative to positive because of the bank’s plan to raise around Eu2bn in January as part of a re-privatisation initiative.