ACCORDING to an announcement yesterday by Moody’s Investors Service, the ratings agency has placed the long-term deposit ratings of Bank of Cyprus on review for an upgrade.
Moody’s action reflects the successful completion of the Bank’s €1 billion capital increase, which was approved by shareholders on 28 August, and which will significantly strengthen the bank’s capital buffers and improve its funding and liquidity profile.
According to Moody’s Rating Action, the review will focus on a forward-looking assessment of the extent to which the strengthened capital and liquidity levels will buffer the bank against continued asset-quality pressures, stemming from the still-stressed domestic operating environment.
This review will focus on the credit implications of:
- the final form of the legislative amendments to the foreclosure framework in Cyprus, which will influence the bank’s ability to sell collateral and, in turn, manage provisioning and capital levels; and
- the outcome of the European Central Bank’s (ECB) comprehensive assessment in October, which will determine any further potential capital needs.
Meanwhile the Bank of Cyprus announced on Monday that it expects its shares to be re-listed on the Cypriot and Athens stock exchanges by the end of October.