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December 6, 2022

Moody’s: Negative outlook for Romania – likely to stay

Moody’s Investors Service analysed the credit trends and outlooks for banking systems in 12 countries within the Commonwealth of Independent States (CIS), the Baltic States and Eastern Europe. The report concludes that, in the near term, Moody’s will likely maintain a negative outlook for most of these banking systems, a press release informs.

In its report, the rating agency points out that, for this year, it would likely maintain negative outlooks for banking systems in Ukraine, Kazakhstan, Hungary, Romania, Bulgaria and the Baltic countries, due to continued negative pressure on financial fundamentals and the still challenging economic environment in many of those countries. Evidence of stabilisation have begun to emerge in a few countries however and the agency says that the outlook for the banking systems in Poland, Russia, Slovakia and Czech Republic could be changed to stable from negative in the second half of 2010. Moody’s notes that changing the outlook on any of these banking systems to stable from negative will depend on sustainable improvements in the key credit drivers, including the country’s macroeconomic environment, asset quality, revenue generation and funding conditions. “In light of current uncertainties in the macroeconomic environment, negative credit trends are likely to persist this year for most European emerging markets banking systems,” said Armen Dallakyan, a London-based Moody’s Assistant Vice President-Analyst, and co-author of the report.

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