Possible downgrade of two Armenian banks

Moody's Investors Service has placed on review for possible downgrade the global local currency (GLC) deposit ratings of two rated Armenian banks (ACBA-Credit Agricole and Ardshininvestbank). All other ratings assigned to these banks were not
affected by this action.
Moody's review of the two banks' ratings will look at the extent to which the Armenian government's ability to provide support to its banking system, if needed, is converging with the government's own debt capacity as a result of the ongoing global economic and credit crisis. At present, the GLC deposit ratings of ACBA-Credit Agricole and Ardshininvestbank receive between a one and two notch uplift due to systemic support.
As such, Moody's will be reassessing the level of systemic support for the aforementioned Armenian banks to determine whether the systemic support they receive needs to be further aligned to the government's local currency bond rating. Moody's will review the specific circumstances of Armenia to determine the appropriate systemic support for Armenian bank ratings and the implications for ACBA-Credit Agricole and Ardshininvestbank.
The review is unlikely to lead to a downgrade of more than one notch in the deposit ratings of the institutions under review.
Meanwhile, the bank financial strength ratings (BFSR) of ACBA-Credit Agricole and Ardshininvestbank are unaffected as Moody's believes that their adequate capitalisation enables them to absorb a level of stress in line with Moody's assumptions.