Moody's Investors Service ("Moody's") has today downgraded to B2 (stable outlook), from B1 (Rating Under Review outlook), the long-term local currency deposit ratings of three Kenyan banks: KCB Bank Kenya Limited (DSE:KCB, NSE:KCB, USE:KCB), Equity Bank Kenya Limited (NSE:EQTY, RSE:EQTY, USE:EBL) and Co-operative Bank of Kenya Limited (NSE:COOP). Moody's has also downgraded the baseline credit assessments (BCAs) of the three banks to b2, from b1.
Today's rating actions conclude the review for downgrade initiated on 4 October 2017 on the three Moody's-rated banks, and follows the weakening of the Kenyan government's credit profile, as captured by Moody's downgrade of the sovereign rating on 13 February 2018. For further information, please see the sovereign press release "Moody's downgrades Government of Kenya's issuer rating to B2 and assigns stable outlook". Although Moody's notes that rated Kenyan banks' credit profiles are underpinned by strong capital and profitability metrics as well as solid deposit-based funding profiles, the rating agency views the sovereign credit profile as a key factor driving banks' creditworthiness given their elevated balance sheet exposure to the sovereign.
Bank specific details and a full list of the banks' other ratings affected by today's rating actions is provided below.
