Moody's locks in Romanian banking rating to negative outlook

Rating agency Moody's will keep the Romanian banking system's rating at a negative outlook, mainly due to difficult economic conditions, which will trigger high provisions for non-performing loans and implicitly a drop in profitability. However, fears about liquidity and capital of lenders in Romania have dropped, according to a recent Moody's report. Systemic risks have been decreased by mother banks' agreement to financially support their subsidiaries in Romania, as promised to the International Monetary Fund (IMF). Ukraine and Bulgaria are in a similar situation, with low expectations of rating improvements from Moody's. Lenders in Poland, the Czech Republic and Russia, however, could receive a stable rating from the rating agency later on this year. Moody's is the only rating agency which hasn't downgraded Romania from the "investment grade", having attributed it the "Baa3" country rating, with a stable outlook. BCR, BRD and Raiffesien Bank lenders also have a" Baa3" rating, with a stable outlook.