Moody’s Investors Service affirmed the long-term local and foreign-currency deposit ratings of Armenia’s Unibank at B3 and changed the outlook to positive from stable for these ratings.

According to Moody’s, the positive outlook on Unibank’s B3 deposit ratings acknowledges the recent strengthening of Unibank’s capital position and is driven by Moody’s expectation of further capital injections before the end of this year.

“Following three capital injections completed in the last 12 months, Unibank plans to raise another AMD 4 billion of equity in October 2016, in order to meet the Central Bank’s revised minimum requirement for regulatory capital, effective in 2017. The requirement is AMD 30 billion, compared to Unibank’s approximately AMD 25.5 billion after its July SPO,” Moody’s noted.

Moody’s expects that Unibank’s regulatory capital will increase by more than 50% compared to year-end 2015, which will strengthen its cushion against potential credit losses.

A downgrade of Unibank’s deposit ratings is unlikely in the next 12-18 months. However, negative pressure on the ratings could develop if Unibank’s asset quality continues to deteriorate, or the bank fails to reach the new minimum regulatory capital requirement by the time it becomes effective, or if its market positions experience material weakening.