International rating agency Moody's Investors Service upgraded Citadele banka's long-term deposit ratings from B2 to B1. Additionally, Moody's has changed the bank's outlook on the long term rating to positive. Thus, Citadele banka's current rating is B1/Not Prime Positive outlook.
Moody's explains the upgrade of Citadele banka's rating with the improvement of the bank's financial results and profitability as well as the increase in its loan portfolio quality and private investors becoming Citadele's shareholders which results in its ability to shape a stronger capital base. Simultaneously, Moody's has also assigned Ba3(cr)/NP(cr) long- and short-term Counterparty Risk Assessments (CR Assessments) to the bank.
"The fact that one of the world's leading rating agencies has upgraded Citadele's rating confirms that the bank is developing in the right direction and that Citadele’s growth opportunities are benefitting from the change of shareholders," comments Guntis Beļavskis, Citadele banka's CEO.
"I especially appreciate that, additionally to upgrading Citadele's rating, Moody's has also determined a positive future prognosis. This speaks volumes for the fact that the international rating agency sees very good development opportunities for us," adds Mr. Beļavskis.
Previously, when JSC Privatization Agency was one of the bank's shareholders, the development of Citadele as a government-supported bank was strictly regulated in accordance with a restructuring plan approved by the European Commission. This plan restricted the bank's growth and capital increase. As private investors became Citadele's shareholders, development restrictions no longer apply. Thus, along with the change of shareholders, Citadele banka can also increase its capital base, and this has been positively evaluated by the Moody's Investors Service.
In its announcement, Moody's remarks that the bank's owners have already proven their willingness to strengthen Citadele's capital and the agency appreciates the fact that the bank's shareholders have already increased Citadele's capital by EUR 10 million and have re-financed the subordinated loan. As a result, Citadele's capital has increased by a total of EUR 19 million.
As reported previously, Citadele Group completed 1Q 2015 with EUR 7.6 million profit, a 30 % increase compared to the same period in 2014. In turn, according to unaudited Citadele's performance results, the bank completed the first quarter of this year with a EUR 5.4 million profit, which is a 6 % decrease compared to 1Q 2014.
Citadele Group closed its books for 2014 with EUR 32.4 million in audited profit, up by 138% compared to 2013. Citadele banka's unaudited profit in 2014 was EUR 29.2 million, up by 91% compared to 2013.
For more information about Citadele's performance results, please visit: west.citadele.lv
For more information about Moody's ratings and methodology, please visit www.moodys.com