National Bank of Greece S.A.

The positive outlook on NBG reflects our anticipation of the easing of credit and funding risks in the operating environment over the next 12 months. Our base-case scenario assumes the private sector's and domestic property markets' continuing recovery. Therefore, we expect credit losses to further normalize to cyclical lows for the financial system, at 80-90 bps in 2024 and 2025. Owing to massive deleveraging, coupled with a strong deposit formation in the past five years, banks' funding and liquidity metrics continue to improve. We could raise the ratings on the bank if we concluded that: Credit losses for Greek banks as a whole dropped to cyclical lows with the recovery of both the economy and creditworthiness of the private sector's

...S&P Global Ratings expects National Bank of Greece (NBG) to maintain higher levels of capital than domestic peers thanks to improved earnings. NBG reported record-high profitability metrics in September 2023, fostered by high interest rates, increased recurring profitability, and the bank's continuous focus on efficiency. In addition, credit losses will moderate as the cleanup of NBG's asset quality is bearing fruit, with the nonperforming exposure (NPE) ratio reaching a record low 3.7% in third-quarter 2023. As a result, we project a risk-adjusted capital (RAC) ratio of 7.6% in 2023 and expect it to further increase until 7.9% in 2025. This also assumes the planned dividend payout of 30% of 2023 earnings. Still, we think the high--albeit decreasing--amount of DTCs, which makes up about 60% of the bank's common equity Tier 1 (CET1) capital, weighs on the bank's creditworthiness, especially compared with that of...

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