Moody’s Investors Service, (“Moody’s”) has downgraded to B2 from B1 the long-term local currency deposit ratings of two Tanzanian banks, CRDB Bank Plc (DSE:CRDB) and NMB Bank PLC (DSE:NMB). Moody’s has also changed the outlook on the banks’ ratings to stable from negative.
The full list of affected ratings can be found at the end of this press release.
The downgrade of Tanzanian banks reflects the banks’ high sovereign exposures, mainly in the form of sovereign debt securities, which link their credit profiles to that of the government, the reduced ability of the government to provide extraordinary support to banks as well as Moody’s expectation of a more challenging operating environment, in view of the coronavirus pandemic, impacting on borrowers’ creditworthiness.
Today’s rating action follows Moody’s view that Tanzania’s credit strength is diminishing (refer to the sovereign press release: Moody’s downgrades Tanzania’s rating to B2; outlook stable).