Moody's downgrades BCR, BRD and Raiffeisen Bank Romania

Financial rating agency Moody’s has downgraded the ratings of three of the largest commercial banks in Romania, in light of its global review of systemic support indicators for the country's banking system, and also because of the asset quality challenges faced by Romanian banks in the currently difficult operating environment.
In case of Banca Comerciala Romana, Moody’s Investors Service lowered by one notch the global local currency deposit ratings to Baa2/P-2, with stable outlook, and left foreign currency deposit ratings of Baa3/P-3 unchanged, also with stable outlook. BCR’s financial strength rating remained unchanged at D with stable outlook.

BRD’s rating on the bank’s financial strength was downgraded to D, from D+. The ratings on the global currency deposit was lowered to Baa2/P-2 (from A2/P-1), with stable outlook, while foreign currency deposit ratings was left unchanged at Baa3/P-3, also with stable outlook.

Moody’s has taken rating actions on Raiffeisen Bank’s subsidiary in Romania, by reducing the global local currency deposit ratings to Baa3/P-3, with stable outlook, from Baa2/P-2, and left foreign currency deposit ratings at Baa3/P-3. Bank financial strength rating remained at D.

Moody’s also noted that “the level of stress in the Romanian banking system has increased due to the deep recession in the country, with the proportion of non-performing loans (NPLs) growing steeply in recent quarters, reaching around 13.4% as of August 2009 based on local standards (loans classified as doubtful and loss)”.

NBR's good regulatory and supervisory framework, Moody’s added, provides some added comfort about Romania's ability to provide systemic support to its banking system. In addition, the rating agency notes that all three Romanian banks' deposit ratings continue to benefit from external support coming from their European parent banks.

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