Moody’s lowers Eurasian Bank

Moody’s Investors Service said it downgraded Eurasian Bank’s long-term deposit and senior unsecured debt ratings to B2 from B1 and downgraded the bank’s baseline credit assessment to B2 from B1.

The agency also said it downgraded the subordinated local-currency debt rating to B3 from B2.

The outlook on the bank’s long-term global scale deposit and senior unsecured debt ratings also was changed to stable from negative.

The downgrades were based on the deterioration in the bank’s solvency metrics, particularly its diminished capital adequacy, Moody’s said.

This deterioration also was associated with the bank’s reduced profitability and the decreased coverage of problem loans by loan loss reserves, the agency said.

The downgrades also were driven by a view that Eurasian Bank’s financial metrics, particularly profitability, will further weaken in the next 12 to 18 months given the deteriorating operating environment in Kazakhstan, Moody’s said.

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