Moody’s downgrades GCB Bank to Caa3 from Caa2

International ratings agency, Moody’s has downgraded GCB Bank PLC’s (GCB Bank) global long-term local currency deposit ratings to Caa3 from Caa2.

Moody’s investors also downgraded the bank’s long-term foreign currency deposit ratings to Ca from Caa2, its long-term Counterparty Risk Ratings (CRRs) to Caa3 from Caa2, its long-term Counterparty Risk Assessment (CR Assessment) to Caa3(cr) from Caa2(cr), as well as its Baseline Credit Assessment (BCA) and Adjusted BCA to ca from caa2.

“The outlook on the Caa3 long-term local currency deposit rating has been changed to negative from ratings under review

The outlook on the Ca long-term foreign currency deposit rating has been changed to stable from ratings under review

It said the “rating action captures the deteriorating macroeconomic environment and the increasingly uncertain operating environment for banks in Ghana, as reflected by the downgrade of the sovereign ratings and the lowering of the Macro Profile score to ‘Very Weak- from Very Weak’.”

“The downgrade of GCB Bank’s BCA to ca, on par with the Government of Ghana’s own ratings (Ca Stable), reflects Moody’s expectation that the sovereign debt restructuring planned by the government will negatively affect GCB Bank’s solvency profile

GCB Bank has sizable holdings of sovereign debt securities, at around 3.6 times its shareholders’ equity and 53% of total assets as of year-end 2021,” it added.