Morningstar DBRS

Cyprus is starting to see some positive shifts in its financial sector, particularly when it comes to tackling nonperforming loans (NPLs). This is an important issue for the country, as bad loans have weighed heavily on its economy in recent years. But this year, things are looking up, and it's a sign that Cyprus is making real progress.

Strong revenue growth, mainly stemming from social security contributions and corporate income tax, have been the main driver of Cyprus' strong fiscal outcomes, which have "improved markedly in recent years," international ratings agency Morningstar DBRS has said. 

Moody’s gave a boost to confidence in the Greek economy by upgrading its outlook from “stable” to “positive”. Although the international rating agency once again kept Greece’s credit rating unchanged at Ba1, just one notch above investment grade.

Morningstar DBRS raised on Friday night its outlook of the Greek economy from Stable to Positive, while affirming the country's credit rating as BBB (low), i.e. investment grade.

Tuesday's balanced bourse session at Athinon Avenue left the benchmark virtually unchanged and a slight majority of stocks that headed higher, while blue chips ended up in the red. Following Monday's growth, the market managed to hold on to its gains as there was no clear direction for traders to take on the day.

The Public Debt Management Agency (PDMA) has already drawn from markets €8.7 billion out of the planned €10 billion through bond issues. Thus, another issue is still a possibility, although several experts caution this is not necessary, and that the outstanding amount can be easily covered via the three planned reissuances.

A new round of ratings assessments for Greece's debt will begin in September. DBRS will start on September 6, followed, a week later, by Moody's, the only one of the credit rating agencies that has not bestowed an "investment grade" rating on Greece.

Greece's "big four" banks (Alpha, Eurobank, National and Piraeus) posted first-half profits totaling €2.3 billion and significantly reduced exposure to bad loans, while also containing operating costs, ratings agency DBRS has noted. 

Despite some of them (like Alpha) resuming dividend payments after many years, capital reserves have strengthened, the agency notes.

Storm clouds are gathering over the Greek economy, at a time when, apart from the domestic challenges that continue to overshadow its prospects, such as demographics, climate change and the still large investment gap with Europe, the strengthening of external geopolitical tensions is creating a new scenario of uncertainty.

Canadian credit rating agency DBRS Morningstar has affirmed the Republic of Cyprus' long-term ratings, maintaining it at BBB (high) with a stable economic outlook.