ECONOMY

Outlook on lenders hits ‘negative’

Ratings agency Fitch lowered its outlook on Greece’s top four banks to negative from stable, reflecting the challenges of an increasingly difficult environment. The news failed to weigh on bank shares traded on the Athens bourse yesterday as they jumped 3.48 percent, boosted by renewed hopes of a recovery in the sector worldwide. The broader Greek market advanced 1.69 percent. The long-term outlooks on National, Eurobank, Alpha and Piraeus were all lowered. Fitch said National’s revenues are expected to come under greater pressure as business volumes slow and cost control will become a key issue. «National will also be challenged to manage rapid loan growth in unseasoned retail markets in Greece and abroad as well as risks from operating in more volatile emerging markets,» it said. National, expected to report 2008 earnings today, is present in 12 countries, including Turkey, Romania and Bulgaria. As for Greece’s second-largest lender, Eurobank, Fitch said the downgrade reflects the negative effects of the abrupt adjustments in the Greek and Southeast European markets. «While management is proactively addressing the situation, the negative outlook reflects the challenges posed by the more difficult operating environment in protecting the bank’s financial performance and risk profile,» it added.