Moody’s Investors Service has confirmed all ratings and assessments of Bank of Cyprus and Hellenic Bank, including their long-term deposit ratings at B3. The outlook for both banks remains positive.

The affirmation reflects the banks’ improved funding and liquidity profiles as well as an increase in capital levels compared to those of a few years ago, balanced by the downside risks associated with the negative impact of the coronavirus on the Cyprus economy.

Positive forecasts reflect the agency’s expectation that the two banks will be able to cope with a more difficult situation, while maintaining capital and liquidity reserves well above regulatory minimums. While Moody’s acknowledges that the relative strengthening of the banks’ solvency profiles is already putting upward pressure on the ratings, in the context of their relatively low Coronavirus Pandemic continues to lead to significant uncertainty.

Moody’s stated that the ratings could be upgraded in the coming quarters if: (a) banks maintained high levels of capital and liquidity; (b) the impact on asset quality after the resumption of payments on loans currently under the moratorium was limited; and (c) the impact of the Coronavirus pandemic on the Cypriot economy was contained.