Moody’s affirms Luminor’s rating and changes its outlook to positive

Moody’s Investor Service (Moody’s) announced the affirmation of Luminor Bank’s Baa1 bank deposit ratings and changed its outlook on its ratings to positive.

Moody’s actions reflect a higher level of capitalization, much reduced dependency on its former parents for funding and the successful reduction of problem loans, balanced against the strategic challenges involved in returning the bank to growth, low profitability and need for continued IT investments. 
 
The rating action follows the positive revision of the macro profiles of Lithuania and Latvia.
 
Luminor CEO Peter Bosek says: “We are pleased that Moody’s recognizes the progress Luminor has made and of the resilience of Baltic economies, especially considering the extraordinary circumstances last year. Moody’s constructive comments are consistent with the next phase of our development and our priorities for this year.”
 
Moody’s affirmed Luminor Bank AS’s long-term and short-term bank deposit ratings of Baa1/P-2, long-term senior unsecured ratings of Baa2, senior unsecured Medium-Term Note program rating of (P)Baa2, and the Counterparty Risk Ratings (CRR) of A3/P-2. Moody’s furthermore affirmed the Baseline Credit Assessment (BCA) of ba1, the Adjusted BCA and the Counterparty Risk Assessment (CRA) of A3(cr)/P-2(cr). The outlook on the long-term bank deposit and senior unsecured ratings was changed to positive from stable.
 
Luminor is the third-largest provider of financial services in the Baltics, with some 900 000 clients, and over 2300 employees. In the Baltic region, it has a market share of 16.1% in deposits and 17.2% in lending as at the end of December 2020. Luminor has total shareholders’ equity of 1.7 billion EUR and it is capitalised with a CET1 ratio of 22.4%.