Moody's on Dec. 14 downgraded Getin Noble Bank SA's long-term local and foreign-currency deposit ratings to Ba3 from Ba2 and affirmed its short-term deposit ratings of Not Prime, with the outlook on the long-term deposit ratings unchanged at negative.
The rating agency also lowered the bank's long-term counterparty risk assessment to Ba2 (cr) from Ba1 (cr), and its baseline and adjusted baseline credit assessments to "b2" from "b1." Its Not Prime (cr) short-term counterparty risk assessment was also affirmed.
The action is based on the bank's weaker standalone credit profile because of its continuously modest loss-absorption capacity. There remains high level of credit risk in both legacy and recently underwritten loans by Getin Noble Bank, with high nonperforming loan ratios leading to weaker asset quality.
Moody's said the lender's profitability is inhibited by considerable loan-loss provisions and modest revenue generation, with its first-half loss amounting to 163 million Polish zlotys. The Polish Financial Supervisory Authority admitted Getin Noble Bank to its long-term-profitability restoration program, which Moody's expects to improve the bank's profitability in the next 12 to 18 months.
The affirmation of the outlook on the long-term deposit rating shows that the bank's solvency metrics will remain pressured by its weak asset quality and high provisioning expenses and costs caused by regulatory measures on Swiss franc mortgages, the agency said.
As of Dec. 14, US$1 was equivalent to 3.58 Polish zlotys.