Nicosia: Fitch Ratings has upgraded Eurobank Limited’s Long-Term Issuer Default Rating (IDR) to ‘BBB’ from ‘BBB-‘ and Viability Rating (VR) to ‘bbb’ from ‘bbb-‘, while the Outlook on the Long-Term IDR was Stable.
According to Cyprus News Agency, the upgrade reflects its assessment of improved business and financial prospects for Cypriot banks due to continued economic growth and falling unemployment and private sector indebtedness.
It is added that the upgrade also factors in Eurobank Ltd’s strengthened business profile following the merger with Eurobank Cyprus Ltd and the acquisition of CNP Assurances SA’s (A-/Stable) Cypriot insurance business, which result in increased revenue diversification in insurance and corporate and private banking, and stronger market shares in Cyprus.
Fitch also states that Eurobank Ltd’s very strong operating profit has been supported by high net interest income on the bank’s large cash holdings and securities, some loan repricing and small loan impairment reversals, while strong revenue allowed the bank to more than offset moderate cost inflation.