LJUBLJANA (Slovenia), September 15 (SeeNews) – Moody's said it has affirmed the long-term local and foreign-currency deposit ratings of Slovenian lender Abanka at Ba1 and changed the outlook to positive from stable.
The outlook action was driven by the upward pressure on the bank's baseline credit assessments (BCA) which was affirmed at ba3, the current two-notches rating uplift for deposit ratings from Moody's Advanced LGF analysis and no rating uplift from government support, Moody's said in a statement on Thursday.
The upward pressure on Abanka's BCA reflects the improved Moderate+ Macro Profile for Slovenia combined with expected further improvements in asset quality, as well as maintaining strong capital adequacy and profitability, Moody's said.
Abanka reported a net income of 32.54 million euro ($38.9 million) in the first half of 2017, down from 47.29 million euro in the prior-year period, owing to a decline in revenues and lower level of reversal of loan loss provisions, the ratings agency noted.
Consequently, the bank's return on assets (RoA) softened to a still comfortable 1.79% as of the first half of 2017 from 2.49% as of the first six months of last year. Abanka is likely to maintain its robust capitalisation with a Tier 1 ratio at 25.7% as of June 2017, Moody's said.
The rating agency expects the bank's problem loans ratio to decline moderately over the next 12 to 18 months from 15.9% reported at year-end 2016. Abanka's problem loans coverage with loan loss reserves was at a comfortable 76% as of year-end 2016.
($ = 0.837441 euro)