Moody’s downgraded five Greek banks on Monday, citing heightened uncertainty regarding the new government’s ability to reach an agreement with its creditors before the end of the current support program that expires at the end of February.
The ratings agency said it downgraded the long-term deposit and senior debt ratings of Piraeus Bank (from Caa1 to Caa2), National Bank of Greece (from Caa1 to Caa2), Alpha Bank (from Caa1 to Caa2), Eurobank (from Caa2 to Caa3) and Attica Bank (from Caa2 to Caa3).
“A possible deadlock in the government’s negotiations with official creditors could place at risk its own liquidity and funding needs, limiting its ability to support the banks in case of need,” Moody’s said in a press release.
The agency also considers there may be a reduction in the Hellenic Financial Stability Fund’s (HFSF) capacity to support the banks, the agency added.
The ratings were placed on review for further downgrade. Moody’s placed Greece’s Caa1 sovereign rating on review for downgrade on February 6.