Moody’s Raises Outlook for National Bank of Greece Long-Term Deposits

Moody’s Ratings has revised the outlook on National Bank of Greece’s long-term deposit ratings to positive from stable while affirming the bank’s long-term deposit and senior unsecured debt ratings at Baa1.

The action follows Moody’s recent revision of Greece’s sovereign rating outlook to positive from stable. Greece’s sovereign rating remains unchanged at Baa3. The change in the bank’s deposit outlook is linked directly to the improved outlook for the sovereign rating.

Moody’s also revised the outlook on National Bank of Greece’s senior unsecured debt to stable from negative. The agency affirmed the bank’s Baseline Credit Assessment and Adjusted Baseline Credit Assessment at baa3.

Other ratings were also maintained. The bank’s short-term deposit rating remains P-2, while its counterparty risk ratings remain at Baa1/P-2. Its Tier 2 debt rating was confirmed at Baa3.

Moody’s said National Bank of Greece’s credit profile is supported by strong recurring profitability, high capitalisation, sound asset quality and a strong liquidity position. At the same time, the bank’s standalone credit profile remains constrained by its exposure to the Greek sovereign and the sovereign rating.

During the first half of 2026, National Bank of Greece recorded an annualised return on tangible equity of 15.5%. Core revenue increased by 3% year-on-year, supported by higher net fee and commission income.

Operating expenses increased by 8% during the period, partly reflecting investments in personnel, technology and digital infrastructure. Despite the higher costs, the bank's normalised cost-to-income ratio was approximately 35% in June 2026.

The bank maintained a common equity Tier 1 ratio of 17.3% in June, compared with an internal target of approximately 13%. Moody’s also noted that the share of deferred tax credits in CET1 had declined to approximately 38%, from 46% one year earlier.

Asset quality remained a further component of the bank’s credit profile. National Bank of Greece’s non-performing loan exposure ratio stood at 2.4%, with NPL coverage at 105%.

Liquidity indicators also remained strong. The bank reported a loan-to-deposit ratio of 67%, a liquidity coverage ratio of 227% and a net stable funding ratio of 143%. Customer deposits represented approximately 91% of total net funding.

The positive outlook indicates that Moody’s could take further rating action if Greece’s sovereign rating is upgraded and National Bank of Greece maintains strong profitability, capitalisation and asset quality over the next 12 to 18 months.

National Bank of Greece’s current Moody’s long-term issuer and senior unsecured ratings remain at Baa1. The bank’s Tier 2 rating is Baa3, while its additional Tier 1 rating is Ba3.

The latest action follows other recent changes to the outlooks of Greek banks after Moody’s revised its assessment of Greece’s sovereign credit outlook. The ratings agency also recently raised the outlook on Eurobank’s long-term deposit ratings to positive while maintaining its Baa1 rating.

National Bank of Greece’s positive deposit outlook therefore reflects the relationship between the bank’s credit profile and the Greek sovereign rating, while its existing Baa1 long-term deposit and senior unsecured debt ratings remain unchanged.

By fLEXI tEAM