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Moody's Downgrades Credit Ratings for 6 Russian Banks
February 25, 2015 22:48

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Moody's taken rating actions on Wednesday on six Russian entities that are subsidiaries of foreign banks, including AO Raiffeisenbank, over deteriorating credit portfolio amid a recessionary environment that is expected to last in the mid-term.
The move follows Moody's downgrade of Russia's government debt rating to Ba1 from Baa3, negative outlook, on 20 February 2015.
The full list of banks affected by the decision includes AO Raiffeisenbank, JSB Rosbank, ING Bank Eurasia, DeltaCredit Bank, Rusfinance Bank and Banca Intesa (Russia).
“The rating agency has thus lowered the standalone bank financial strength ratings (BFSRs) of all but one of the named banks, Rusfinance Bank, whose BFSR was maintained,” reads the official statement.
“Moody's downgraded the supported senior unsecured, subordinated debt and local currency deposit ratings of all but one of the named banks, Rusfinance Bank. These ratings incorporate Moody's assessment of the parental support uplift that is derived from particular parent banks' ratings,” says the press release.
“The lowering of AO Raiffeisenbank's standalone BFSR from D+ to D and downgrade of the long-term ratings from Ba1 to Ba2 reflects recent severe and rapid deterioration in the operating environment that will substantially weaken AO Raiffeisenbank's historically strong asset quality and profitability. Moody's also notes the deleveraging plans of AO Raiffeisenbank's parent to decrease risk-weighted assets in Russia by 20% in the next three years, that might further negatively weigh on the Russian bank's revenue,” the statement goes on to explain the rationale behind the decision concerning AO Raiffeisenbank.
“JSB Rosbank's BFSR was lowered to D- (BCA of ba3) from D (ba2), with a negative outlook reflecting Moody's expectations of further pressures on the retail lender's asset quality and profitability driven by the weakening of the borrowers' creditworthiness in the context of a sharp economic contraction and a high interest rate environment,” according to Moody’s.
ZAO Raiffeisenbank is a subsidiary of Raiffeisen Bank International AG. The Bank has been operating in Russia since 1996 and offers a full range of services to retail and corporate customers, both resident and non-resident, in roubles and foreign currencies. The Bank’s activities are supervised by the Moscow territorial department of the Bank of Russia, says the corporate bio page.
In 2006. Raiffeisen International Banking Group (before merge Raiffeisen International and RZB) purchased 100% shares in OAO Impexbank, and on 23 November 2007, the legal merger between Impexbank and Raiffeisenbank Austria was successfully completed.
ZAO Raiffeisenbank, which aims to strengthen its position as one of the leading universal bank in the region, is regarded as one of the most reliable banks in Russia by the ratings agencies.

Raiffeisenbank ranks 13th among the Russian banks in terms of assets, based on Q3 2014 results (Interfax-CEA). According to the same Interfax-CEA data, ZAO Raiffeisenbank ranked 6th in terms of liabilities of individuals and 9th with regard to consumer lending. 

Author: Mikhail Vesely

Tags: Russian banks     

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