Fitch Downgrades Greek Banks to 'CCC' after Sovereign cut

FXstreet.com (San Francisco) - Fitch ratings has downgraded 5 Greek banks from B- to CCC. The decision follows the sovereign debt cut published on Thursday and answers the same line on fears about Greece exit from the eurozone.

"Fitch Ratings has downgraded National Bank of Greece's, Efg Eurobank Ergasias', Alpha Bank's, Piraeus Bank's and Agricultural Bank of Greece's Long-term Issuer Default Ratings (IDR) and Support Rating Floors (SRF) to 'CCC' from 'B-' and Short-term IDRs to 'C' from 'B'," the official statement says.

The reason is the concerns over the market about the exit of Greece from the Eurozone after June 17 elections. "An exit of Greece from EMU would be probable and/or this could be followed by a withdrawal of international support to Greek banks," Fitch says and adds that "a Greek exit would likely result in widespread default on private sector as well as sovereign euro-denominated obligations."

Troika has been supporting Greek government and Greek Bank, "However, such support has not yet been transferred to the banks and further capital injections will be needed to reach the minimum 9% core capital ratio required by the Bank of Greece by September 2012. "

And as far as "the Bank of Greece and the ECB have continued to provide emergency liquidity assistance" to banks, the solvency of the Greek banks is on risk.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

RELATED TOPICS