Moody’s revises Ukraine banking outlook to stable from positive

Moody’s Investors Service has changed its outlook for Ukraine’s banking system to stable from positive, the Interfax Ukraine news agency reported Friday.

Ukraine’s continuing economic recovery will provide a stable operating environment for banks, although the country’s economic growth will slow to about 2.8 percent to 3 percent in 2019-20, Moody’s Investors Service wrote in a recent report.

The stability of Ukraine’s operating environment will also depend on its ability to continue to work with the International Monetary Fund, according to the report.

At the same time, Moody’s experts underlined that rapidly growing consumer loans will pose risks to asset quality in the longer term.

Earlier in December 2018, Moody’s Investors Service upgraded Government of Ukraine’s issuer and senior unsecured bond ratings to Caa1 from Caa2.

Moody’s Investors Service ranks the creditworthiness of borrowers using a standardized rating scale which measures expected investor loss in the event of default.