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Moodys says that NBGs sale of its Bulgarian operations is Credit Positive

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In its Credit Outlook, published yesterday, Moody’s said that it considers the sale of NBG’s 99.91% stake in UBB and its 100% stake in Interlease to KBC Bank as credit positive for the Greek lender because it will improve its Q1’17 CET1 ratio by c100bps to 17% (pro-forma for a total dividend distribution by UBB of €183m) and boost its liquidity by around €900m- allowing the bank to reduce its ELA (at €5.7bn, as of May’17).

 

A reduction in ELA, which currently costs 1.5%, will also reduce the bank’s funding cost, improving its margins and profitability.

 

As per the rating agency, the sale will reduce the bank’s risk-weighted assets, following similar deleveraging actions over the past two years in connection with a restructuring plan that the bank committed to regulatory authorities that it would undertake.

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