Yerevan /Mediamax/. Moody’s Investors Service rating agency upgraded to Ba1 (from Ba2) the long-term Global Local Currency (GLC) deposit rating## of ACBA-Credit Agricole Bank.

Mediamax reports that the upgrade of the rating, according to Moody’s, is conditioned by ACBA-Credit Agricole Bank’s elevated relative importance in the Armenian banking system and its stabilized ranking as Armenia’s third largest bank.

In 2007, ACBA-Credit Agricole Bank’s share of banking system assets and loans in Armenia exceeded 10% and 13%, respectively.

Moody’s notes that if the Armenian banking sector continues to grow at rates exhibited in recent years, access to capital funds will be an important factor determining banks’ market positioning.

At that, Moody’s notes that ACBA-Credit Agricole Bank faces a challenging and potentially volatile operating environment, with heightened political risk, which appeared in post-electoral events.

“Despite excellent reported asset quality, the bank’s loan portfolio has yet to go through a full credit cycle and thus its credit loss and risk assumptions are untested and are likely understated”, the statement of Moody’s Investors Service reads.