Moody's downgrades Diamond Bank

Moody's Investors Service said it downgraded the baseline credit assessment and adjusted baseline credit assessment on Diamond Bank plc to Caa3 from Caa1.

Moody's also said it downgraded Diamond's long-term local-currency and foreign-currency deposit ratings to Caa1 from B3.

The agency also placed the deposit and other senior ratings and assessments on review with direction uncertain. Diamond's not-prime short-term local- and foreign-currency deposits and counterparty ratings and NP(cr) short-term counterparty risk assessments also were affirmed.

The downgrades follow the departure of Diamond's chairman of the board and three other non-executive board members, Moody's said, along with the subsequent announcement of the bank's third quarter financial results, which showed a lack of progress in reducing problematic exposures.

The downgrades also consider the bank's weak solvency, which is characterized by low provisions set aside for its high level of non-performing loans, the agency said.

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