Moody's Investors Service ("Moody's") upgraded Ameriabank’s Baseline Credit Assessment (BCA) to ba3 from b1 and affirmed the bank’s long-term deposit ratings at Ba3. The rating agency also changed the outlook on the Ba3 long-term deposit ratings to stable from negative.

The upgrade of Ameriabank's BCA and Adjusted BCA to ba3 from b1 is driven by the bank's asset quality resilience through pandemic combined with dramatically improved capital adequacy and profitability over the last two years. The upgrade of the bank's long-term Counterparty Risk Ratings (CRRs) to Ba2 from Ba3, and the upgrade of the long-term Counterparty Risk Assessment (CR Assessment) to Ba2(cr) from Ba3(cr) follows the BCA upgrade.

The rating agency notes that Ameriabank continues to demonstrate robust performance as reflected in a very high return on tangible assets of 3.6% in 2022 and 3.5% (annualized) during the first quarter of 2023. This was supported by strong pre-provision income, lower credit costs and robust cost efficiency with a cost to income ratio of 45% in Q1 2023.

According to Moody's, Ameriabank also materially improved its asset quality in 2021-2022 following the pandemic. The share of non-performing loans (NPL) decreased to 2.5% as of Q1 2023 from 4.2% at the end of 2020. NPL coverage by reserves remains robust at 80% as of Q1 2023.

Ameriabank's capital buffer has materially strengthened over the recent years amid strong profitability and modest loan book growth.

The outlook on Ameriabank's long-term deposit ratings is stable, reflecting Moody’s view that the bank will maintain its sound fundamentals over the next 12-18 months. Ameriabank rating outlook update follows the sovereign rating outlook change from negative to stable.