03.07.2015Moody's assigns B1/NP first-time ratings to Bulgaria's Municipal Bank

The municipal financing, the adequate capital buffers and liquidity are the prerequisites for the Bank’s stability

The International Rating Agency Moody's has assigned first-time B1/Not-Prime local and foreign-currency deposit ratings to Municipal Bank AD and a baseline credit assessment (BCA) of b2. The B1 long-term deposit ratings carry a stable outlook. Moody's has also assigned a Ba2(cr)/Not-Prime(cr) Counterparty Risk Assessment (CR Assessment), which is two notches higher than its B1 deposit ratings and is indicative for the stability and potential of the Bank to manage the risk.
Municipal Bank benefits from its niche focus in municipal financing and budget servicing that represents a stable and relatively low risk business. The Bank has over 28% market share in municipal budget servicing and over 20% share in loans to the municipal sector. Municipal Bank works with 33 municipalities, providing 27 of them with complete bank servicing. Loans to budget entities have performed well in the past and current impairments on these loans are zero, so these loans reduce the overall asset risk in the bank's  portfolio.
At the same time Moody’s reports also Municipal Bank’s availability of adequate capital buffers. The continuing trend for capitalisation of the annual profit improves Municipal Bank's capital ratios and increases its ability for risks covering.
"The Moody's rating reflects the Municipal Bank's stability. This assessment of the international credit agency gives us confidence in our choice to specialize in the municipal financing and thus to guarantee to our clients stable business terms, good deposit policy and capital adequacy" comments Sasho Tchakalski, Chairman of the Management Board and Executive Director of Municipal Bank.