Moody’s upgrades Bank of Cyprus

Moody's Investors Service said it upgraded Bank of Cyprus PCL’s long-term local and foreign currency deposit ratings to Caa1 from Caa2, provisional senior unsecured euro medium-term notes to provisional Caa1 and subordinated and junior subordinated euro medium-term notes to provisional Caa2.

The bank's Not Prime short term ratings were affirmed.

The action was driven by the upgrade of Bank of Cyprus’ baseline credit assessment (BCA) to caa1 from caa2.

The outlook on the long-term deposit ratings remains positive.

Moody’s said the upgrade reflects the improvement in Bank of Cyprus’ financial fundamentals – mainly profitability, asset quality, capitalization and its funding position.

The agency expects the bank to remain modestly profitable in 2017, following its return to profitable performance in 2016 after five years of losses.

Moody’s also said it expects further improvement in the bank's asset quality metrics as ongoing loan workouts and collateral sales are supported by the strong economic recovery.

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