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Moody's Investors Service has today changed to negative from stable the outlook on Ghana Commercial Bank Ltd's B1 local-currency long-term deposit ratings and B2 foreign-currency deposit ratings.

Concurrently, these deposit ratings and the E+ standalone bank financial strength rating (which maps to a b2 baseline credit assessment) were affirmed.

The rating actions follow the change in the outlook on Ghana's B1 government bond ratings to negative on 5 December 2013 (please see "Moody's changes outlook on Ghana's B1 sovereign rating to negative from stable").

The rating actions reflect (1) the risk of further weakening in the government's capacity to support the bank in case of need; and (2) Ghana Commercial Bank's high exposure to government securities, which links the bank's standalone creditworthiness to that of the sovereign.

Moody's will likely downgrade Ghana Commercial Bank's deposit ratings if the Ghanaian sovereign's creditworthiness weakens further, leading to (1) a weakened capacity of the government to provide support, and/or (2) an increase in the credit risks embedded in the bank's loan and securities portfolios.

Although upward pressure on Ghana Commercial Bank's ratings is currently limited, improvements in the domestic operating environment and sovereign's credit risk profile that could prompt Moody's to change the outlook on Ghana Commercial Bank's deposit ratings to stable.



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