Moody's on Feb. 15 downgraded the long-term local- and foreign-currency deposit ratings of Co-operative Bank of Kenya Ltd., Equity Bank (Kenya) Ltd. and KCB Bank Kenya Ltd. to B2/B3 from B1/B2, with stable outlooks.
The agency also downgraded KCB Bank Kenya's long-term local- and foreign-currency issuer ratings to B2 from B1, as well as the three banks' baseline and adjusted baseline credit assessments to "b2" from "b1" and their long-term counterparty risk assessments to B1(cr) from Ba3(cr).
The rating actions, which mark the conclusion of a review for downgrade initiated Oct. 4, 2017, are driven by the weakening of Kenya's credit profile, which promoted Moody's to downgrade the sovereign rating on Feb. 13.
The banks' credit profiles are linked to that of the state, whose B2 rating constrains the banks' stand-alone credit profiles and their local-currency deposit ratings, Moody's said.
Moody's, meanwhile, affirmed the banks' short-term bank deposits at NP and their short-term counterparty risk assessments at NP(cr). KCB Bank Kenya's short-term issuer rating was also affirmed at NP.