Moody's: Recession affects Baltic banks

As part of its global framework for estimating the effects of the recession on banks' ratings, Moody's Investors Service said it presented the framework behind its assumptions for estimating Baltic banks' credit losses.

The Baltic states have been affected and will continue to be affected by the recession in the region, the agency said, with GDP decreasing dramatically in all three countries.

The downturn is being felt by banks first and foremost through losses in their loan and securities portfolios as well as through pressure on their pre-provision income, Moody's said.

In the current operating environment, where most asset classes are being adversely affected by the global recession, it is essential to take a forward-looking approach to banks' creditworthiness, the agency said.

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