...IDRs Capture Weak Profile: The Issuer Default Ratings (IDRs) and Viability Ratings (VRs) of Bank of Cyprus Public Company Ltd (BoC) and Hellenic Bank Public Company Limited (HB) reflect remaining high vulnerabilities of their capital to exceptionally high problem loans and to a still-weak economy. BoC's VR is one notch below HB's due largely to its weaker funding and liquidity profile. The Stable Outlook on HB's IDR reflects Fitch's view that this bank's credit profile is set to stabilise. High NPEs Challenge Viability: BoC's and HB's end-1H15 non-performing exposures (NPEs) remained exceptionally high at 62% and 58% of their gross loans (excluding suspended income) respectively, underlining a still weak operating environment in Cyprus. Although both banks have strengthened their capitalisation by raising equity and deleveraging, their solvency remains highly vulnerable to levels of unreserved NPEs that significantly exceed their Fitch eligible capital bases (330% at BoC and 231% at HB)....
