Moody`s | Positive outlook for the Cypriot banking system
On the 1st of August 2016, the rating agency Moody’s Investors Service published a report announcing the upgrade of the outlook on the Cypriot banking system from stable to positive.
The outlook reflects Moody’s expectation on the banks’ creditworthiness and profitability perspectives for the next 12 to 18 months.
According to Melina Skouridou, an Assistant Vice President at Moody’s and author of the said report “after five years of losses, we expect banks in Cyprus to be profitable in 2016 and foresee a modest 0.3% – 0.5% return on assets […] Cyprus’ accelerating economic recovery, driven by a revival of tourism, the strengthening business services sector and increased consumer spending, will support momentum in banks’ loan restructurings and generate some new business for the banks“.
Furthermore, Moody’s expects funding conditions for Cypriot banks to improve as domestic deposits will continue to grow reflecting the improved economic conditions and the increased creditors’ confidence in the Cypriot banking system.