Co-operative Bank has received a boost after getting the highest rating in deposits in Kenya from global financial services firm Moody’s Investors Service.
The rating means that Co-op Bank, which was also ranked as the second best bank in Kenya by Cytonn Investments, can continue to mobilize deposits from domestic and global institutional investors.
“Co-op Bank’s B1 global local-currency long-term deposit ratings are fully aligned with the B1 (stable) rating of the Kenyan government,” the firm said. “The bank reached this rating level solely based on its stand-alone strength, as indicated by its B1 stand alone BCAs, Moody’s highest ratings in Kenya.”
The rating firm further stated an expectation on Co-op Bank to pursue a more aggressive loan growth strategy in the coming months after its loan book expanded by 15.06 per cent year-on-year in three months ended March 31 to Sh. 245.9 billion.
“Focus on stronger borrowers should help contain asset quality pressure arising from pocket exposures to weakening sectors, such as in the trade sector,” the firm said.
Locally, Co-op Bank was ranked nationally at an impressive Aa2. Moody’s further observed that Co-op Bank will most likely not be affected by the capping of interest rates in the long run.
According to Moody’s, the bank has a strong ability to absorb any losses arising from reduced interest earnings as well as liquidity buffers any weakening loan quality.
