Morningstar DBRS Revises Trend on National Bank of Greece S.A.'s Deposit Ratings to Positive After Sovereign Rating Action

DBRS Ratings GmbH (Morningstar DBRS) revised the trend on National Bank of Greece S.A.'s (NBG or the Bank) BBB (low) Long-Term Deposits and on the R-2 (middle) Short-Term Deposits to Positive from Stable. The Bank's Issuer Ratings and Intrinsic Assessment (IA) are unaffected by this rating action. A full list of rating actions is included at the end of this press release.

KEY CREDIT RATING CONSIDERATIONS
The trend change to Positive from Stable follows Morningstar DBRS' credit rating action on the Hellenic Republic. On 6 September 2024, Morningstar DBRS confirmed the Hellenic Republic's Issuer Ratings at BBB (low)/R-2 (middle) and revised the trend to Positive from Stable. (For more details on the rationale for the sovereign credit rating action, please refer to the press release "Morningstar DBRS Changes Trends on the Hellenic Republic to Positive, Confirms Ratings at BBB (low)" https://dbrs.morningstar.com/research/439029.)

Morningstar DBRS rates deposits in Greece one notch above the Bank's IA, up to the same rating level as the Hellenic sovereign. This reflects the legal framework in place in Greece, which has full depositor preference in bank insolvency and resolution proceedings. As a result, the Bank's Long-Term Deposits are rated BBB (low); however, the trend has been changed to Positive, in line with the trend on the sovereign credit rating.

CREDIT RATING DRIVERS
The Long-Term and Short-Term Deposit credit ratings of the Bank will generally be affected by changes in the Bank's IA. However, an upgrade would result from an upgrade of the Hellenic Republic's sovereign credit rating. The trend would revert to Stable if the trend on the Hellenic sovereign reverts to Stable.

In addition the deposit credit ratings could also be affected by any further changes in the legal framework for bank resolution and/or creditor hierarchy.

An upgrade of the IA would require an upgrade of the Hellenic Republic's sovereign credit rating and NBG to maintain its improved underlying profitability and asset quality on a sustained basis while preserving adequate capital buffers. An improvement in NBG's funding diversification and quality of capital could also contribute to an upgrade.

A downgrade of the IA would result from a downgrade of the Hellenic Republic's sovereign credit rating or a material deterioration in NBG's asset quality and underlying profitability.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
Credit rating actions on the Hellenic Republic are likely to have an impact on this credit rating. ESG factors that have a significant or relevant effect on the credit analysis of the Hellenic Republic are discussed separately at
https://dbrs.morningstar.com/issuers/17484.

There were no Environmental factors that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (13 August 2024) https://dbrs.morningstar.com/research/437781.

Morningstar DBRS notes that this Press Release was amended on 2 October 2024 to incorporate the endorsement disclosure.

Notes:
All figures are in Euros unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (4 June 2024) https://dbrs.morningstar.com/research/433881. In addition Morningstar DBRS uses the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings https://dbrs.morningstar.com/research/437781 in its consideration of ESG factors.

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

The sources of information used for these credit ratings include Morningstar Inc. and company documents. Other sources include NBG H1 Results Press Release, NBG H1 2024 Results Presentation, and NBG H1 2024 Report. Morningstar DBRS considers the information available to it for the purposes of providing these credit ratings to be of satisfactory quality.

Morningstar DBRS does not audit the information it receives in connection with the credit rating process, and it does not and cannot independently verify that information in every instance.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS' outlooks and credit ratings are under regular surveillance.

For further information on Morningstar DBRS historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: https://registers.esma.europa.eu/cerep-publication. For further information on Morningstar DBRS historical default rates published by the Financial Conduct Authority (FCA) in a central repository, see https://data.fca.org.uk/#/ceres/craStats.

The sensitivity analysis of the relevant key credit rating assumptions can be found at: https://dbrs.morningstar.com/research/439362.

These credit ratings are endorsed by DBRS Ratings Limited for use in the United Kingdom.

Lead Analyst: Andrea Costanzo, Vice President - European Financial Institution Ratings
Rating Committee Chair: Marcos Alvarez, Managing Director - Global Financial Institution Ratings
Initial Rating Date: 30 April 2024
Last Rating Date: 30 April 2024

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