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Fitch affirms BoC’s and HB’s long-term issuer default rating

March 30, 2018 at 1:03pm
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Fitch Ratings has affirmed Bank of Cyprus`s (BoC) Long-Term Issuer Default Rating (IDR) at B-and Hellenic Bank`s (HB) Long-Term IDR at B. The Outlooks on both banks` Long-Term IDRs are Stable.

Fitch has also upgraded the Long-Term rating of BoC`s Tier 2 subordinated notes to CCC/RR6 from CC/RR6 and removed it from Rating Watch Positive.

“BoC`s and HB`s ratings are driven by the banks` poor asset quality and the resulting high encumbrance of capital by problem assets” Fitch said in a report on Thursday, noting that HB`s ratings factor in the high share of high quality non-loan earning assets on its balance sheet, which support its overall asset quality and liquidity, and drive the one-notch difference relative to BoC`s ratings.

According to Fitch, despite the fact that BoC achieved an almost 40% reduction in the stock of non-

(CNA)