Moody's Investors Service, ("Moody's") has today placed on review for downgrade the B1 global scale long-term local-currency deposit ratings and the b1 baseline credit assessment (BCA) of three Kenyan banks: KCB Bank Kenya Limited (KCB Bank), Equity Bank Kenya Limited (Equity Bank), and Co-operative Bank of Kenya Limited (Co-op Bank). A full list of the banks' ratings affected by today's rating action is at the end of this press release.
Today's rating action is driven primarily by a potential weakening of the Kenyan government's credit profile, in particular in the country's fiscal strength and liquidity risk, as captured by Moody's recent decision to place Kenya's B1 government ratings on review for downgrade. The banks' sizable holdings of sovereign debt securities inevitably link their creditworthiness to that of the national government. To a lesser extent, today's rating action also captures pressures on Kenya's macro profile, in light of the currently challenging operating conditions, which are in turn weighing on the banks' asset quality profiles. For further information, refer to the sovereign press release "Moody's places Kenya's B1 rating on review for downgrade".
