BSTDB’s rating outlook changed to stable by Moody’s

News | 30-Sep-2016

On September 30, Moody's Investors Service changed the rating outlook for the Black Sea Trade and Development Bank (BSTDB) to stable from negative and affirmed its long-term and short-term A2/P-1 issuer ratings. At the same time, the Bank's Medium-Term Note programme has been affirmed at (P)A2 and the senior unsecured debt ratings at A2.

Moody’s says that the key drivers underlying its decision are (i) the improvement in BSTDB's asset quality with the reduction of non-performing loans (NPLs) and (ii) the stabilisation of macro conditions in Russia and Ukraine with expected return to positive growth in 2017.

Moody's assigned a negative outlook to BSTDB's rating in March 2015 due to the economic crisis in Russia and Ukraine, which represented more than 30% of the Bank's loan book. By the end of 2015, the ratio of Non-Performing Loans in the Bank’s portfolio declined to 1.2% compared with 5.5% at the end of 2014.

Moody’s explained its affirmation of BSTDB's A2 rating by the Bank’s sound capital adequacy and liquidity position, coupled with the strength of member support which has proven resilient to the weakening of the credit profile of several member countries over the past two years. Moody’s sees BSTDB's key credit metrics broadly aligned to those of A-rated peers.