S&P reaffirms ABA's credit rating at 'B+' with Stable outlook
ABA Bank, a leading Cambodian bank and subsidiary of National Bank of Canada, announces that Standard & Poor's Global Ratings Agency (S&P) on December 17 reaffirmed ABA Bank's credit rating at 'B+' with Stable outlook.
The Stable outlook reflects S&P's view that the Bank will sustainably manage rapid loan and deposit growth despite the COVID-19 pandemic. The researchers also expressed the opinion that ABA's business franchise trajectory, capitalization, risk profile, and funding and liquidity will remain unchanged over the next 12 months.
S&P said, "ABA's business franchise is strengthening, in our view, underpinned by significant growth in its market share. The bank continues to expand its loan market share, physical and digital distribution network, and customer base. We believe its expansion ambitions and good operating efficiency support its above-average profitability".
The S&P experts specifically mentioned the stable business position of ABA and its potential for further growth: "We expect ABA to continue to experience absolute and relative rapid growth in its business franchise and loan book. The bank is well-positioned to take advantage of an expected post-pandemic economic rebound. This will likely be reflected in continued growth in its market share of loans and deposits over the next 18 months."
The bank's large customer deposit base will likely continue to grow at least in line with loans, with its strong digital platforms to be a competitive advantage, the S&P report concludes. "We view the increase in customer deposits as positive, given these funds are generally stickier than wholesale funding. The National Bank of Canada has demonstrated an ongoing willingness to invest in ABA's subordinated debt which, in our view, also gives ABA access to tighter pricing in wholesale debt markets".
Zhiger Atchabarov, Chief International Operations Officer at ABA Bank, commented, "We welcome the credit rating reaffirmation by S&P. It confirms the solidity of our strategy, high quality of our assets, and emphasizes the financial stability of ABA despite current challenges, both local and global."
S&P assigned a 'B' credit rating to ABA Bank in 2017. The rating was upgraded to 'B+' in 2019 based on the bank's material and growing market share of loans and deposits, with above-average profitability.
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