ECONOMY

Moody’s remains positive on Greece’s credit sector outlook

Moody’s remains positive on Greece’s credit sector outlook

Moody’s announce on Wednesday it has maintained its positive outlook for Greece’s banking system despite difficult economic conditions and inflationary pressures, which are likely to constrain economic growth in 2022, but with a likely pickup in activity in 2023.

“Banks still have the capabilities to fully implement their nonperforming exposure (NPE) reduction plans, which will further improve their asset quality. Robust corporate credit demand will continue, supporting Greek banks’ asset quality and core profitability, while loan-loss provisioning needs will be significantly lower, as banks continue to offload NPEs. They significantly reduced legacy NPEs in 2021, mainly through securitizations, and plan to continue this practice in 2022. Capital levels will stabilize because banks took the bulk of NPE securitization losses upfront in 2020-21. Funding and liquidity will remain sound as customer deposits increase,” argued Moody’s.