Moody's ups three Slovenian banks

Moody's Investors Service said it upgraded the long-term deposit ratings of Nova Ljubjanska banka dd and Nova Kreditna banka Maribor dd to Caa1 from Caa2 and Abanka Vipa dd to Caa2 from Caa3.

The outlook on the ratings of Nova Ljubjanska and Nova Kreditna was changed to stable, while the outlook on Abanka's long-term deposit ratings is positive.

Concurrently, the agency raised the banks' baseline credit assessments within the E bank financial strength rating category to Caa2 from Ca for Nova Ljubjanska, Caa2 From Caa3 for Nova Kreditna and to Caa3 From Ca for Abanka. Each bank's E bank financial strength rating was affirmed.

Moody's said the upgrade of the long-term ratings reflect the higher baseline credit assessments. The raising of the banks' standalone baseline credit assessments follows a bank recapitalization program launched by the Slovenian government (Ba1 stable) in December.

As part of the recapitalization program, Nova Ljubjanska and Nova Kreditna completed the transfer of a large portion of their non-performing loans to a government-owned Bad Asset Management Co. For Abanka, this process is expected to be completed by the end of the 2014 first quarter.

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