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Economy

Moody’s Revises Greek Banks’ Outlook to Stable

April 15, 2020
ANA

ATHENS – Moody’s on Wednesday revised Greek and Cypriot banks’ outlook to stable from positive as a result of the coronavirus pandemic.

In an announcement, the credit rating agency said it expected the two countries’ economies to shrink this year and to return to positive growth rates in 2021.

For Greek banks, Moody’s said that the profitability of the Greek banking system will weaken and non-performing exposures will remain at very high levels, or around 40 pct of total loans. Government support measures include additional liquidity and other facilities for moving capital of enterprises, which will help to slowdown the creation of new NPEs, along with a decision to extend repayment of loans for vulnerable customers.

Travel restrictions are expected to hit strongly the tourism sector, which accounts for around 12 pct of the country’s GDP. At the same time, a large decline in domestic demand will burden the sectors of transport and logistics, commerce and manufacturing.

Commenting on real estate prices, Moody’s said that although home prices have risen in the last two years, a significant correction is not possible, given the big drop of prices in the period 2010-2017.

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