Fitch downgrades Bank of Cyprus long term rating

Fitch downgraded the Bank of Cyprus (BOCY) long term issuer default credit rating estimating that the acquisition of Uniastrum Bank in Russia increases the risks of the Group.
According to Fitch, the downgrade reflects the strategy of rapid growth of BOCY in recent years including the acquisition of Uniastrum which differentiates the risk profile of the Group and may adversely affect the capitalization of the Bank in a period of economic crisis. Despite the downgrade, Fitch recognizes the large market share of BOCY in the local market, the strong cost efficiency, profitability, capital base and improved loan portfolio in Cyprus as a result of tighter credit terms.
These will enable the Group to absorb any deterioration in the quality of its assets as well as the increased cost of financing and liquidity which resulted from the current market conditions.