The house gave a signal for a positive evaluation Fitch. Shortly before revealing today his assessment of Creditworthiness of Greece, the house speaks of substantial progress on the red loans front and predicts their decline in single-digit percentages in 2022. His estimates for the profitability of banks are also positive.
The strong recovery rates and the funds of the Recovery Fund are finally coming to offer further support to the prospects of the sector, according to the analysts of the house.
In the context of the online conference Credit Outlook EMEA 2022 analysts of the house reported that Greece continues to present the highest, with a difference index of non-performing exposures (NPEs) in the Eurozone, however, has managed to reduce it drastically in the last year and this year will probably fall below 10%.
These remarks reinforce the scenario that Fitch wants to move forward today. in upgrading prospects (outlook) to “positive” from “stable”, without excluding surprises. Improving the quality of banks’ assets is one of the key conditions set by the house for the upgrade of the debt to bring it closer to the investment level.
The last review of the Greek rating by Fitch was made on July 16, when the house analysts had confirmed the BB with stable outlook. This debt reflects the weak growth prospects in the medium term, the levels of red loans and government debt that still remain very high, analysts said at the time.
At the time, Fitch predicted that 2021 would close with growth 4.3% and that 2022 would bring rates 5.3%, with the help of the Recovery Fund. For 2023, he “saw” rates of 3.5%.
Already, Fitch upgraded forecasts these in October and now waiting 6% growth for 2021.
As of October, the house noted that the greek debt reached a “ceiling” in 2020 (ie a year earlier than expected) at 205.6% of GDP and will now begin to decline, to fall to 196.2% by 2023.
It should be noted that Fitch opens with Greece the cycle of its ratings for 2022, essentially inaugurating a year in which there are great expectations that a decisive step will be taken towards the exit of the country from category “garbage” (junk) and the recovery of the investment grade.
During the new year the house will give ratings today, on July 8 and October 7.
Athens expects to have recovered the investment category by 2023. In fact, DZ Bank has pointed out that the efforts in this direction bring results and are recognized by the rating agencies.
Greece was among the few countries that upgraded in the pandemic. Specifically, S&P upgraded Greece to BB positive from BB-stable in April. The last upgrade from Moody’s was in November 2020, to Ba3 stable from B1 stable. Fitch held the toughest stance, given the effects of the coronavirus, and changed its rating to BB stable from BB positive in April 2020, with no further move since.
It is noted that this year they are completed 12 years since the country was downgraded to the investment grade “garbage” (junk), which was recorded in April 2010, with the exclusion from the markets and the subsequent recourse to the International Monetary Fund and the EFSF.
Reportage: Konstantina Dimitrouli