Reuters: Credit agencies reaffirm and upgrade Slovakia

bratislava in august 2011

Moody's, which gives Slovakia an A1 sovereign rating with a stable outlook, said on Friday that Slovakia's access to money and bank reserves for any future turbulence are on the increase and reaffirm the country's stable outlook.

The central European country has not had to bail out any of its financial institutions because of the global financial crisis due to the conservative governance of the banking system, and its sound economic recovery, driven mainly by foreign demand, had helped keep banks sound.

"Continuing economic growth and decreasing unemployment have contributed to stabilising the stock of problem loans and to decreasing the loan-loss charges in Q1 2011, whilst macroeconomic developments will be the main driver of asset quality over the next 12-18 months," said Simone Zampa, a Moody's Vice President and senior analyst.

Slovak bank profits more than doubled last year, and Moody's expected this trend would continue, demonstrated by a 79.5 percent annual jump in profitability in the first half.

The Slovak central bank's stress tests in April showed an improvement in financial strength.