KYIV, July 9 – Moody's Investors Service has raised its outlook for Ukraine's banking system to positive from stable, reflecting the rating agency's expectation that the creditworthiness of the country's banks will improve over the next 12 to 18 months, driven by improving asset quality and a return to profitability.

"Ukraine's economy will continue to recover gradually, stimulating credit demand and improving borrowers' capacity to repay their loans. Now that banks have recognized most of their non-performing loans, provisioning charges should also decline, bolstering profits," Moody's report, "Banking System Outlook – Ukraine - Improving asset quality and profitability drive positive outlook," quoted Lev Dorf, an AVP and analyst at Moody's Investors Service, as saying.