Capital Intelligence Ratings (CI Ratings or CI) has affirmed the Long-Term Foreign Currency Rating (LT FCR) and Short-Term Foreign Currency Rating (ST FCR) of Hellenic Bank (HB) at ‘BB-’ and ‘B’, respectively. At the same time, CI Ratings has affirmed HB’s Bank Standalone Rating (BSR) of ‘bb-’. The Outlook for the LT FCR and BSR remains Stable.
The Bank’s BSR is derived from a Core Financial Strength (CFS) rating of ‘bb-’ and an Operating Environment Risk Anchor (OPERA) of ‘bb-’, the latter reflecting moderate economic and industry risks. The LT FCR is set at the same level as the BSR as it is uncertain whether extraordinary support would be forthcoming from the authorities in the event of financial distress. Our support assessment takes into account Cyprus’ implementation of the EU’s Bank Recovery Resolution Directive, which makes it likely that senior creditors would be required to absorb losses prior to the Bank receiving any official support. It also factors in the moderate capacity of the government (rated ‘BB+’/‘B’/ Stable by CI) to provide timely and sufficient assistance to the Bank in the event of need.
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