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Bond Market News
Piraeus Bank Upgraded to Ba1 by Moody’s
March 19, 2025
Piraeus Bank was upgraded by a notch to Ba1 from Ba2 by Moody’s. The upgrade reflects improvements in asset quality, profitability, and liquidity of the bank. Piraeus’s non-performing exposure (NPE) ratio dropped to 2.6% from 3.5% in 2023, with provisioning coverage rising to 65%. The bank is also working to reduce government-guaranteed delinquent loans worth ~€700mn ($800mn) and real estate-owned assets worth €1.5bn ($1.6bn). Strong profitability of the bank supports the upgrade, with ROE at 17.5%, a net interest margin (NIM) of 2.6%, and a cost-to-core income ratio of 30%. Capital metrics have also improved, with its CET1 ratio at 14.7%, but deferred tax credits (DTCs) remain high at 65% of CET1. The bank plans to reduce this to under 25% by 2028 while maintaining a CET1 target of 16.5%. The acquisition of Ethniki Insurance may reduce CET1 by 150bp but is said to enhance earnings in the long run. With a loans-to-deposits ratio of 63% and an LCR of 219%, the bank’s funding and liquidity position remains strong. The bank was upgraded by S&P to BB- last month.
Its bonds traded stable with its 7.25% 2028s up at 108.9, yielding 3.2%.
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