Moody's on Jan. 20 assigned first-time ratings to Tanzania-based National Microfinance Bank Plc.
Moody's assigned the lender long-term local- and foreign-currency deposit ratings of B1/B2, with stable outlooks. Other ratings assigned to National Microfinance Bank include Not Prime short-term local- and foreign-currency deposit ratings; Ba3(cr) /Not Prime(cr) long- and short-term counterparty risk assessments; and "b1" baseline and adjusted baseline credit assessments.
The ratings reflect the bank's "solid capitalization and profitability metrics, supported by its retail-focused domestic franchise; strong liquidity buffers and a retail-deposit funded profile that has withstood the gradual reduction of government deposits; relatively low nonperforming loans that benefit from the solid performance of its salary-linked personal loans; and risks posed by high banking competition and lower potential growth in salary-linked loans," Moody's said.
Moody's noted that it expects the bank's profitability to remain a credit strength, given its solid franchise as one of Tanzania's two largest lenders and its beneficial association with Rabobank, which holds a 35% stake in National Microfinance Bank and provides support in various areas, including recommending three senior management appointments.