Moody's rating agency has affirmed Alpha Bank Romania (ABR) ratings and improved to positive from stable the outlook on the long-term deposit ratings.

The action, Moody’s says, reflects the opinion that ABR has made significant progress over the past years in improving solvency and its funding profile, contributing to upward pressure on the bank's baseline credit assessment (BCA). This resulted in Moody's aligning the outlook on ABR's ratings with the positive outlook on ABR's Greek parent Alpha Bank AE, whose weaker credit standing constraints ABR's credit profile.

Following a series of non-performing loan sales, ABR has much improved its solvency profile. It reported a non-performing loan ratio of 6% as of H1 2018, significantly down from 14% in 2016, Moody’s explained. The improved solvency of the bank provides a solid base for the bank's future loan growth.

“While core earnings generation is still weak, we expect ABR's earnings to improve on the back of gradually recovering lending that should partially offset benefits from lower reversals of loan-loss provisions,” Moody’s report reads.

The bank's profitability has been volatile with return on asset of 0.7% as of H1 2018 down from 1.4% in 2017.

Moody’s upgrades Romania’s rating outlook to positive

editor@romania-insider.com

(photo source: Facebook / Alpha Bank)