Standard&Poor's (S&P) announced on December 16 it had raised its long-term counterparty credit and certificate of deposit ratings on Bulgarian American Credit Bank (BACB) to BB- from B+.
At the same time, the short-term counterparty credit and certificate of deposit ratings were affirmed at B. The outlook is stable.
The rating action reflects the maintenance of a robust financial profile, in particular, consistently high profitability, good capitalisation, and the benefit of cheap and stable term funding, said S&P's credit analyst John Gibling. In addition, the bank benefits from a consistent and focused strategy, and a steadily improving Bulgarian economy.
The ratings on the bank are constrained, however, by its small niche business activity in the risky small and midsize Bulgarian corporate segment, small absolute levels of capital, and high loan growth in an environment where economic and industry risks are above average.
The stable outlook reflects S&P's expectation that capital will continue to support BACB's credit growth and development, and be maintained at a good level to absorb potential losses.
In addition, S&P expects BACB's profitability to remain at a strong level proportionate to its risk profile. Future improvements in BACB's creditworthiness will depend on positive developments in Bulgaria's economic and industry risks.
- Business Staff
At the same time, the short-term counterparty credit and certificate of deposit ratings were affirmed at B. The outlook is stable.
The rating action reflects the maintenance of a robust financial profile, in particular, consistently high profitability, good capitalisation, and the benefit of cheap and stable term funding, said S&P's credit analyst John Gibling. In addition, the bank benefits from a consistent and focused strategy, and a steadily improving Bulgarian economy.
The ratings on the bank are constrained, however, by its small niche business activity in the risky small and midsize Bulgarian corporate segment, small absolute levels of capital, and high loan growth in an environment where economic and industry risks are above average.
The stable outlook reflects S&P's expectation that capital will continue to support BACB's credit growth and development, and be maintained at a good level to absorb potential losses.
In addition, S&P expects BACB's profitability to remain at a strong level proportionate to its risk profile. Future improvements in BACB's creditworthiness will depend on positive developments in Bulgaria's economic and industry risks.
- Business Staff
