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February 28, 2021

Moody’s modified the rating for some of Erste Bank branches

The financial evaluation agency Moody’s revised yesterday the rating and the perspective for some of the branches of the Austrian banking group Erste Bank, after the same agency lowered the rating of the main two banking groups from Austria, RZB and Erste, because of their exposure in Eastern Europe, a press release of the rating agency informs, Agerpres reports. For the Romanian Commercial Bank (BCR), Moody’s revised the perspective for the deposits in RON, from stable to negative. The modification of the indicator for BCR reflects the negative perspective associated with the rating for financial solidity of the parent group Erste Group Bank, rating which was lowered from “C” to “C minus.” In turn, Moody’s left unchanged the rating Baa3/Prime-3 with stable perspective for the deposits in foreign currency of BCR. Moody’s also reduced two levels, from Aa2 to A1, the rating for the long term debts of RZB, the majority shareholder of Raiffeisen International. Moody’s also reduced the evaluation for financial solidity of RZB from “C” to “D plus.”The rating agency left unmodified, at Aa3, the rating for long term debts of Erste Group Bank, but lowered the evaluation for financial solidity, from “C” to “C minus.” Erste is less exposed than Raiffeisen to the risky countries from outside the European Union, such as Ukraine and Russia, even if one of the most important assets is the Romanian Commercial Bank, the biggest bank in Romania, country which has recently signed a loan agreement with the International Monetary Fund. Moreover, Moody’s estimated that RZB is capable to absorb losses and depreciation of additional assets worth EUR 4 bln, while Erste could absorb new losses of EUR 4.3 bln.

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