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Moody's revises outlook on ratings of 2 Tanzanian lenders

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Moody's revises outlook on ratings of 2 Tanzanian lenders

Moody's on March 6 affirmed the B1/Not Prime long- and short-term local-currency bank deposit ratings and B2/Not Prime long- and short-term foreign-currency bank deposit ratings of CRDB Bank Plc and NMB Bank Plc and revised the outlook on the long-term ratings to negative from stable.

At the same time, Moody's affirmed the "b2" baseline credit assessment and adjusted baseline credit assessment and the B1(cr)/NP(cr) long- and short-term counterparty risk assessments of CRDB Bank. The rating agency affirmed the same ratings of NMB Bank at "b1" and Ba3(cr)/NP(cr), respectively.

The negative outlook on both Tanzanian lenders' long-term ratings is based on the similar outlook assigned to Tanzania's B1 rating. NMB Bank's high exposure to government debt links its credit profile to that of the Tanzanian government, resulting in the bank's credit profile and ratings being constrained by the rating of the sovereign. CRDB Bank's B1 long-term local currency bank deposit rating benefits from one notch of systemic uplift. As a result, the negative outlook on the rating is based on the Tanzanian government's potentially weakening capacity to support the lender, according to the rating agency.