Sun, 05 Aug 2018 02:46 IST
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Moody’s Places Co-Operative Bank on review for Downgrade

New York, July 31 ( – Analysts at Moody’s Investors Service has placed on review for downgrade the A3 bank deposit and senior unsecured debt ratings, the baa1 standalone credit profile and certain junior securities of the Co-operative Bank Plc.

In a research note published yesterday, the analysts mention that the review of the bank’s rating has been initiated after the announcement that The Co-operative bank, the ultimate parent of Co-operative Bank, has agreed non-binding terms with Lloyds Banking Group (NYSE: LYG) for the Co-operative Banking Group to acquire the assets and liabilities that LYG has been required by the European Commission to sell.

The key factors that the review will be focusing on are the steps that the Co-operative Bank would take to ensure the smooth integration of Verde and the composition and quality of the loan assets that would be acquired. It will also consider the bank’s exposure to any further deterioration in the challenging UK economy, mainly due to its exposure to commercial property and its relatively high level of impaired loans, the effect that the acquisition might have on the bank’s profitability, which is currently subdued, the expected effect on the bank’s capitalization under stress and the projected development of the bank’s liquidity and funding profile, the analysts say.