TEXT-S&P affirms 4 Greek banks ratings

Overview
-- On Feb. 27, 2012, we lowered our long- and short-term sovereign credit
ratings on Greece to 'SD' (selective default).
-- We believe that rated Greek banks are likely to incur sizable losses
on their Greek government bond portfolios upon completion of Greece's recently
launched exchange offer.
-- However, we read the Greek authorities' public statements as
indicating that sufficient public funds should be available to address
immediate potential capital and liquidity shortfalls.
-- We are therefore affirming our 'CCC/C' long- and short-term ratings on
the four banks that we rate--National Bank of Greece S.A., EFG Eurobank
Ergasias S.A., Alpha Bank A.E., and Piraeus Bank S.A.
-- The negative outlooks reflect the possibility that we could further
lower the long- and short-term ratings on all four banks if we believe they
will default on their obligations, as defined by our criteria.

Rating Action
On March 2, 2012, Standard & Poor's Ratings Services affirmed its 'CCC/C'
long- and short-term counterparty credit ratings on four Greek banks--National
Bank of Greece S.A. (NBG), EFG Eurobank Ergasias S.A. (EFG), Alpha Bank A.E.
(Alpha), and Piraeus Bank S.A. (Piraeus). We have also affirmed our 'CC' issue
ratings on their hybrid securities.

The outlooks on the long-term ratings on the four banks are negative.

Rationale
The affirmations follow our downgrade of the Hellenic Republic (Greece) to
'SD', on Feb. 27, 2012. Our downgrade of Greece was partly based on the Greek
government's bond exchange offer launched last week, which we believe will
likely lead to sizable losses for rated Greek banks. That said, based on Greek
government and EU authorities' public statements, we believe that sufficient
public funds should be available to recapitalize all the banks and enable them
to comply with regulatory capital requirements. The rating actions also
reflect our expectation that these banks' funding capacity and liquidity
position will likely not further deteriorate, based on the European Council's
statement that Greek banks will continue to receive financial support. Such
support in our view should allow these banks to maintain eligible collateral
for discounting through European liquidity support mechanisms, including the
Emergency Liquidity Assistance (ELA) set up at the Bank of Greece, even if the
relevant ratings on Greek sovereign debt are lowered to 'D' (default).

We assess the stand-alone credit profiles (SACPs) for all four banks at 'cc'.
Our 'CCC' long-term ratings on these banks show a two-notch differential from
their respective SACPs, indicating the uplift we factor in for extraordinary
liquidity support provided by EU authorities.

On Feb. 24, 2012, the Greek government launched an exchange offer on its
outstanding sovereign bonds. According to the publicly available terms of the
swap, while the nominal value haircut on the bonds will account for about
53.5%, we currently estimate that the net present value potential losses could
be significantly higher and potentially reach a total of about 65%-75% of the
nominal initial value. In our view, the Greek banks we rate are directly and
significantly exposed--to varying degrees--to Greek country risk through these
rated banks' large government bond portfolios. We therefore believe that these
banks will likely incur sizable losses on their government bond holdings upon
completion of the deal, which would, in our view, substantially impair their
capital bases.

According to Greek and EU authorities' public statements, however, public
funds will be made available to recapitalize all Greek banks if needed. In
this context, we understand that the European Central Bank (ECB;
AAA/Stable/A-1+), the International Monetary Fund (IMF), and EU authorities
have already allocated a total of EUR30 billion from the "first aid" package
provided to Greece to cover the banks' capital needs. Moreover, according to
Greek government public statements, we think that the total recapitalization
fund could be enhanced by an additional EUR10 billion to foster its capacity to
support banks under stress. Based on these statements, we have taken the view
that these facilities should backstop these banks' ability to continue meeting
their respective regulatory capital requirements once losses arising from
their Greek government bond portfolios are recognized.

Our ratings also reflect our view that Greek banks should be able to continue
pledging Greek sovereign debt collateral eligible for discounting at European
funding facilities--including the ELA set up at the Bank of Greece-- even if
the relevant ratings on Greek sovereign debt are lowered to 'D' (default) (see
"Greece Ratings Lowered To 'SD' (Selective Default)," published Feb. 27,
2012). We base our opinion on the European Council's statement that it will
offer credit enhancement to underpin the quality of pledged Greek sovereign
debt and therefore allow continued use of that collateral by Greek banks to
access European liquidity facilities.

Our current ratings on the four Greek banks continue to factor in a 'b+'
anchor, which draws on our Banking Industry Country Risk Assessment (BICRA)
methodology and our view on both the economic risk of the main countries where
they operate and the industry risk of Greece, where the banks are
incorporated. They also reflect our view of the banks' "adequate" business
position, "weak" capital and earnings, "weak" risk position, "average"
funding, and "very weak" liquidity, as our criteria define these terms.

Outlook
The negative outlooks reflect the possibility that we could downgrade EFG,
Alpha, Piraeus, or NBG, if we believe they will default on their obligations,
as defined by our criteria. Taking into consideration what we see as a
meaningful possibility of default, there is an inherent CreditWatch with
negative implications associated with our 'CCC' long-term ratings (see "How
Standard & Poor's Uses Its 'CCC' Rating," published Dec. 12, 2008).

We could lower the ratings on the four banks if their access to liquidity
support from extraordinary mechanisms set up by EU authorities, including the
ELA discount facility, is impaired for any reason, given that this support
currently underpins the banks' capacity to meet their financing requirements.
In this context, we also note that persistently high pressure on banks' retail
funding bases may lead to further deposit outflows, which could in our opinion
increase the need for Greek banks to receive additional extraordinary
liquidity support from European authorities. Should the banks' access to the
abovementioned liquidity support deteriorate, we would conclude that the four
banks are likely to default as defined under our criteria.

We could also lower the ratings on the four banks if we believe they are
likely to default, as defined by our criteria, due to any developments
associated with a substantial impairment of their solvency. This could happen
if, for any reason, Greek banks cannot access external capital support, or if
we consider such support as insufficient to allow the banks to continue
meeting regulatory capital requirements once the potentially large losses on
their holdings of Greek government bonds are recognized or the potentially
sizable credit impairments arising from lending portfolios are taken into
account.

The outlooks could be revised to stable if the risks we see to all four banks'
financial profiles abate, and if we perceive that extraordinary financial
support will likely enable them to survive without defaulting on any of their
obligations.

Ratings List
Ratings Affirmed

NATIONAL BANK OF GREECE

National Bank of Greece S.A.
Counterparty Credit Rating CCC/Negative/C
Certificate Of Deposit CCC/C
Preference Stock CC

NBG Finance PLC
Subordinated* CC

National Bank of Greece Funding Ltd.
Preferred Stock* CC

*Guaranteed by National Bank of Greece S.A.

PIRAEUS BANK

Piraeus Bank S.A.
Counterparty Credit Rating CCC/Negative/C
Certificate Of Deposit CCC/C

Piraeus Group Capital Ltd.
Preferred Stock* CC

Piraeus Group Finance PLC
Senior Unsecured* CCC
Subordinated* CC
Commercial Paper* C

*Guaranteed by Piraeus Bank S.A.

ALPHA BANK

Alpha Bank A.E.
Counterparty Credit Rating CCC/Negative/C
Certificate Of Deposit CCC/C

Alpha Credit Group PLC
Senior Unsecured* CCC
Subordinated* CC
Commercial Paper* C

Alpha Group Jersey Ltd.
Junior Subordinated* CC
Preferred Stock* CC
Preference Stock* CC

*Guaranteed by Alpha Bank A.E.

EFG EUROBANK ERGASIAS

EFG Eurobank Ergasias S.A.
Counterparty Credit Rating CCC/Negative/C
Certificate Of Deposit CCC/CC

EFG Hellas (Cayman Islands) Ltd.
Senior Unsecured* CCC

EFG Hellas Funding Ltd.
Preference Stock* CC

EFG Hellas PLC
Senior Unsecured* CCC
Subordinated* CC
Commercial Paper* C

EFG Ora Funding Limited III
Senior Unsecured* CCC

*Guaranteed by EFG Eurobank Ergasias S.A.