Moody's on Tuesday upgraded the outlook of deposit ratings of Alpha Bank, Eurobank and National Bank to 'positive' from 'stable', with the long-term deposit ratings currently standing at Caa1.

The credit rating agency also upgraded Eurobank’s and National Bank's CRA to B1 from B2 and reaffirmed all other credit ratings of all three banks.

"Today’s rating action is primarily driven by our expectation of further improvements in asset quality, funding and profitability in 2019-2020, benefiting from a more supportive operating environment," Nondas Nikolaidis, senior credit officer said.

"A recent change in government in Greece was likely to speed up growth-friendly economic policies, helping banks to imprlement their strategic plans and improve financial performance," Moody's said in an announcement.

The credit rating agency said stronger than 2.0 pct annual economic growth in the coming years would support banks' efforts to reduce their large stock of bad loans. Greek banks' NPEs amounted to 45.2 pct of gross loans at the end of the first quarter, down from 48.6 pct in March 2018.

Moody's said that banking system's problem loans were likely to decrease to around 34 billion euros or 21.2 pct of gross loans by the end of 2021 from 82 billion euros in December last year.