Moody’s rates Piraeus

Credit ratings agency Moody’s said yesterday that Piraeus Bank’s majority control of ETBA Bank and link-up with bancassurance group ING this year will give the country’s sixth largest financial group a significant boost. Piraeus Bank which acquired a 58-percent stake in ETBA, the state-controlled former development bank, for 510 million euros earlier this year will benefit from a strengthened franchise, Moody’s said. «Although Piraeus Bank’s capital position has been under pressure due to rapid business growth and equity portfolio losses, the acquisition of ETBA Bank has boosted the group’s capital adequacy ratios,» the agency said. It said profitability remained satisfactory and a cut above domestic competitors despite a significant decline in the last three years. The takeover of ETBA lifted Piraeus’s share of assets and loans in the Greek banking sector to 10 percent from 8 percent and also reinforced its liquidity. On the minus side, ETBA’s problematic loans have impaired Piraeus’s asset quality, Moody’s pointed out. ETBA’s non-performing loans last year were estimated at around 21 percent of total loans. Piraeus’s strategic alliance with the ING group through joint ventures in bancassurance, employee benefits and asset management, is set to reinforce its presence in the retail market and and the asset management sector, Moody’s said. It affirmed its Baa2/Prime-2/C- ratings for Piraeus Bank and also maintained a positive outlook for the Baa2 long-term foreign currency deposit rating and a stable outlook for the Prime-2 short term foreign currency deposit rating and C- financial strength rating. The ratings reflected the bank’s medium size and fast-growing franchise, Moody’s said.

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