WEB DESK
The global financial rating agency Moody’s Investor Services has placed 7 Bangladeshi banks long term ratings and assessments on review for downgrade.
The move comes following the announcement on 9th December that the company has placed Government of Bangladesh’s long-term ratings on review for downgrade. The outlooks have been changed to rating under review.
The banks under review by Moody’s include BRAC Bank, City Bank, Dutch Bangla Bank, Eastern Bank, NCC Bank, Premier Bank and Mercantile Bank Limited. Moody’s has also downgraded Social Islami Bank Limited’s (SIBL) long-term foreign currency deposit ratings to B3 from B2.
Bangladesh’s sovereign credit strength is a key input in Moody’s assessments of bank ratings because the country’s credit strength affects the government’s capacity to provide support to the banks in times of stress. If Moody’s were to downgrade Bangladesh’s sovereign rating, it will likely result in lower long-term ratings for the banks, said a statement issued by Moody’s.
The rating action also considers the deterioration in the country’s foreign exchange reserves and central bank’s measures to limit foreign currency outflows, which have tightened foreign currency liquidity in the banking system.