BRAC Bank has maintained a steady rating from Moody’s Investors Service Ba3, even amid the ongoing turmoil from the Covid-19 pandemic.
Moody’s has changed the outlook from ‘negative’ to ‘stable’ for BRAC Bank. They have also affirmed the long-term local and foreign currency deposit and issuer ratings of BRAC Bank at Ba3, for the fifth consecutive year, said a press release.
The stable outlook on BRAC Bank reflects Moody’s expectation that Bangladesh’s robust economic growth and the pandemic-related forbearance measures that eased the debt repayment burden of affected borrowers, will limit the bank’s asset quality deterioration, and support its solvency over the next 12 to 18 months.
The affirmation of BRAC Bank’s ratings reflects its above-peer average capital position and asset quality, which offsets its moderate profitability. The funding structure is strong and has improved, backed by its established domestic franchise, Moody’s reported.
“We are pleased to receive this news, especially given the abundance of financial challenges resulted due to Covid-19,” said Selim RF Hussain, Managing Director and CEO of BRAC Bank.
According to Moody’s, BRAC Bank’s capital will remain stronger than rated peers’ over the next 12 to 18 months, as internal capital generation keeps pace with loan growth. Its tangible common equity is the highest among rated local peers. BRAC Bank’s asset quality will remain superior because of the less-risky nature of its granular small and medium enterprise (SME)-oriented portfolio.
