Moody's lowers Raiffeisenbank

Moody's Investors Service said it downgraded Raiffeisenbank (Bulgaria)'s long- and short-term local and foreign-currency deposit ratings to Ba1/Not Prime from Baa3/Prime-3 and standalone bank financial strength rating to D-, mapping to a standalone credit assessment of Ba3, from D+/Ba1.

The outlook is stable.

Moody's said this action reflects (a) Bulgaria's challenging operating environment; (b) Raiffeisenbank's asset-quality deterioration and Moody's expectation of further deterioration given the bank's exposures to the construction and real-estate sector and high concentrations (although collateralized and within regulatory limits); and (c) subsequent pressure on the bank's profitability, stemming from relatively high provisioning requirements and subdued loan growth.

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