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Moodys expects NBG to be the first bank to repay its ELA over the next 12-18 months

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Moody’s said that the sale of stake in insurance subsidiary is credit positive; expects NBG to be the first bank to repay its ELA over the next 12-18 months.

 

Moody’s said on 3 July 2017 that NBG’s sale of its 75% stake in Ethniki Insurance is credit positive because it will receive €718.3m that will boost its common equity Tier 1 (CET1) ratio by around 110bps and reduce its emergency liquidity assistance (ELA) funding.

 

According to Moody’s, NBG has been actively pursuing a restructuring plan under which it sells core and non-core assets and focuses on its domestic banking operations. Together with the recent sale of its Bulgarian operations, these two transactions will increase NBG’s pro forma CET1 to around 18.1%, the highest among its local peers and compared with 16% reported in March’17. Moody’s also expects NBG to be the first bank to repay its ELA and to do so over the next 12-18 months, mainly with the sale of its foreign subsidiaries and a return of more customer deposits, as confidence returns amid a modest economic recovery in 2017-18.

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