Divorce does no harm

The collapse of merger talks between Greece’s two biggest banks, the National Bank of Greece (NBG) and Alpha Bank, will not affect them in the short term, say international analysts. Yesterday, international credit rating agencies Fitch and Standard & Poor’s affirmed the credit ratings of the two banks and agreed that their outlook is stable. «Both banks will now continue their race for market share and their regional expansion; in the rapidly consolidating Greek banking system, future mergers or acquisitions involving these banks are likely,» said Fitch in a London announcement. Fitch’s ratings of both banks are ‘A-‘ Long-term, ‘F2’ Short-term, ‘C’ Individual and ‘2’ Support. Standard & Poor’s are triple-‘B’-plus long-term and ‘A-2’ short-term, Each firm uses its own rating system. «The ratings on NBG reflect the bank’s size and powerful position in the Greek financial markets, strong liquidity, and good levels of capitalization and profitability. In addition, asset quality is improving and problem assets are at a manageable level. «The ratings on Alpha reflect the bank’s consistently strong financial condition and its leading position in the Greek financial system,» explained Standard & Poor’s. Contrary to expectations, Standard & Poor’s views state-owned National Bank as stronger than its leaner, private-sector would-be partner. «Continuing restructuring and revitalization are strengthening NBG’s financial and business profiles, which is crucial, given the increasingly competitive Greek market. In addition, the improving economy is helping to improve NBG’s revenue-generating capacity,» says S&P. «Alpha’s performance is projected to improve, with a likely widening in interest margins. Alpha’s medium-term performance is, however, contingent on it making strategic inroads into retail activities. Standard & Poor’s believes Alpha would benefit from a strategic alliance with a strong bancassurance, retail, and investment-banking partner. The outlook and ratings could come under pressure, however, if the group’s performance continues to lag,» it adds. He also pointed to a pilot program on eco-tourism with Turkey and Albania under which Greece provides its technical expertise to the two neighboring countries.

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