Moody's Investors Service has placed a negative outlook on the C- financial strength rating (FSR) of Cyprus Popular Bank (CPB).
The negative outlook reflects Moody's opinion that rapid overseas expansion, domestic market weakness and continued group losses challenge the bank's capital resources simultaneously.
Moody's explains that asset quality problems in Cyprus, despite liberal problem loan recognition requirements, and weakness in the domestic lending, insurance and investment sectors are having a continued negative impact on CPB.
At the same time, while the bank's Greek expansion strategy is likely to produce long-term benefits, domestic operating conditions and potential capital-raising resource constraints are likely to delay the realization of these benefits, according to the rating agency.
Combined with regional instability that is likely to further negatively impact the domestic economic environment, Moody's concludes that the balance of factors is negative for the bank's intrinsic financial strength rating. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
