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Fitch upgrades viability ratings of 2 Greek lenders

Fitch Ratings on June 5 upgraded the viability rating of National Bank of Greece SA and Alpha Bank AE to "ccc+" from "ccc" and affirmed their long-term issuer default ratings, along with those of Piraeus Bank SA and Eurobank Ergasias SA, at Restricted Default.

The rating agency also affirmed the "ccc" viability rating of Piraeus Bank and Eurobank, removing the viability ratings of all four banks from Rating Watch Evolving, where they were placed in December 2017.

The actions follow the publication of Fitch's updated bank rating criteria and a periodic review of the ratings on Greek lenders.

Fitch noted that the viability ratings of Greek lenders reflect scarce, albeit improving, liquidity. The viability ratings are also constrained by banks' exceptionally weak asset quality and high capital strain due to unreserved problem loans, the agency said.

The issuer default ratings, meanwhile, reflect Fitch's view that Greek banks are defaulting on a significant portion of their senior obligations given that capital controls are still in place, the agency added.