Fitch Ratings confirms the evaluation with B- of National Bank, Piraeus Bank, Alpha Bank and Eurobank, giving them a stable outlook. At the same time, the agency upgraded the ratings of senior bank bonds (to B-/RR4 from CCC/RR5) and subordinated bonds (to CC/RR6 from C/RR6), mainly due to a lower burden on their balance sheets following the restructuring and recapitalization.

Fitch notes that after six years of recession, the asset quality of Greek banks is weak, and it is estimated that it will continue to deteriorate for the remainder of 2014, although at a slower pace.

Specifically, Fitch estimates that at the end of 2013, problem loans reached 45.6% for Alpha Bank, 41.3% for Piraeus Bank, 31.7% for Eurobank and 29.7% for National Bank. At the same time, reserves for problem loans ranged below 50% coverage rates which Fitch considers low in a stress scenario.

Analysts attribute the lower levels of problem loans of National Bank due to Finansbank’s contribution and noted that the ratio of non-performing loans of Eurobank is benefitting from a relatively resistant mortgage portfolio.

With the economic recovery impacting with a delay in non-performing loans, Fitch expects further deterioration in asset quality this year. The firm predicts the growth of the Greek economy by 0.5% in 2014.