FRANKFURT (MNI) – Standard and Poor’s has downgraded four Greek
banks to B+ on Thursday and has kept all the ratings on “watch
negative”.

The following is the third part of a verbatim text of the press
release, detailing the reasons for the individual downgrades:

CREDITWATCH

The negative CreditWatch implications on all of our ratings on the
four Greek banks mirror those on our sovereign ratings on Greece,
indicating the likelihood of a further downgrade of the banks in the
event of another sovereign downgrade.

We could also lower the ratings on the Greek banks if we believe
that the vulnerabilities in their financial profiles to a negative
operating environment and frail market confidence translate into a
weakening of their financials beyond what we currently anticipate.
Specifically, we could lower our ratings on the Greek banks if we
believe that deposit outflows could occur of such a magnitude that
measures beyond ECB support might need to be considered to contain the
impact on these banks’ liquidity position.

We could also lower our ratings on the Greek banks if, in contrast
to our current belief, meaningful operating losses materially impair the
banks’ capital bases, or if asset quality deteriorates more than we
currently anticipate. We believe that public perception of an increased
likelihood of government debt restructuring could have a negative effect
on private sector borrowers’ willingness to pay their debts,
particularly in the context of the Greek private sector’s comparatively
weak payment culture with respect to Western European standards.

The negative CreditWatch listing of UBB primarily reflects that of
its parent, NBG. Our CreditWatch resolution of UBB will therefore depend
on that of NBG, but also on our analysis of UBB’s contingency plans to
replace funding from its parent if such support were withdrawn.

RELATED CRITERIA AND RESEARCH

All of the articles listed below are available on RatingsDirect on
the Global Credit Portal, unless otherwise stated.

* Greece BICRA Changed To Group 7 From Group 5 On Higher Economic
and Industry Risks, March 31, 2011
* Greece Downgraded To ‘BB-‘ On Confirmed ESM Borrowing Terms; Still
On Watch Neg; Teleconference Today At 4:30PM BST, March 29, 2011
* Bank Capital Methodology And Assumptions, Dec. 6, 2010
* Stand-Alone Credit Profiles: One Component Of A Rating, Oct. 1,
2010
* Use Of CreditWatch And Outlooks, Sept. 14, 2009
* Group Methodology, April 22, 2009
* Hybrid Capital Handbook: September 2008 Edition, Sept. 15, 2008
* Bank Rating Analysis Methodology Profile, March 18, 2004
* Sovereign Risk For Financial Institutions, Feb. 16, 2004

[TOPICS: M$$EC$,M$X$$$,M$$CR$,MT$$$$]