Sunday, October 23, 2016
Fitch upgrades Cyprus
Fitch Ratings has upgraded Cyprus by one notch from ‘B+’ to ‘BB-’with a positive outlook on continuing strong progress in its adjustment following the 2013 banking crisis.
Cyprus exited its EU and IMF bailout programme in March, outperforming fiscal and economic targets. It also successfully lifted capital controls and has taken steps to restructure its banking sector.
The banking sector is gradually strengthening, proven by the rise in deposits and stable capitalisation.
“Deleveraging is ongoing, with overall sector assets down to 3.7 times the GDP in June 2016 from almost six times in 2009,” Fitch said.
The Bank of Cyprus — placed into resolution in 2013 and recapitalised partly through a bail-in of depositors — has reduced its reliance on emergency liquidity assistance, to €1.5bn by August 2016 from over €11bn in April 2013.
The property sector remains illiquid but prices seem to be stabilising at around 30 per cent below their 2008 peak.
Continued affirmation of the recovery in Cyprus.