Fitch takes actions on Cypriot banks

Fitch Ratings said it took rating actions on the three largest Cypriot banks following the agreement the Eurogroup reached with the Cypriot authorities on Monday morning as a precondition to provide €10 billion in financial assistance to Cyprus.

Fitch downgraded the long- and short-term issuer default ratings of Cyprus Popular Bank to default and those of Bank of Cyprus to restricted default from B, respectively, on losses imposed on senior creditors.

The fact that Bank of Cyprus will continue to operate in Cyprus, while Cyprus Popular Bank will be wound-down drives the difference in their long-term issuer default ratings.

The support rating floors of the two banks have been revised to NF from B and support ratings to 5 from 4 as a result of the bail-in of senior creditors. Following this, Fitch also downgraded their VR to F from C.

Fitch also maintained the rating watch negative on Hellenic Bank's ratings except for its CC VR, which has been revised to rating watch evolving from rating watch negative.

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