First-Time ratings
Moscow, August 26, 2008 -- Moody's Investors Service has assigned the
following global scale ratings to ING Bank Eurasia (IBE): Baa1 long-term and
Prime-2 (P-2) short-term foreign and local currency deposit ratings and a D
bank financial strength rating (BFSR). The outlook for all ratings is
stable.
At the same time, Moody's Interfax Rating Agency has assigned a Aaa.ru
long-term national scale credit rating (NSR) to IBE. Moscow-based Moody's
Interfax is majority-owned by Moody's, a leading global rating agency.
The Baa1/P-2/D global scale ratings assigned to IBE reflect global
default and loss expectation, while the Aaa.ru national scale rating
reflects the standing of the bank's credit quality relative to its
domestic peers.
According to Moody's, the bank's Baa1/Prime-2 local and foreign currency
deposit ratings are primarily driven by the expected support from IBE
controlling shareholder -- ING bank N.V- which is rated by Moody's at
Aa1/Prime-1/B.
According to Moody's, the bank's D FSR reflects its selective customer
approach in corporate banking targeted at providing services to
multinationals operating in Russia and top-notch local corporates and a
solid franchise in security services operations. The bank's BFSR is also
supported by its low credit risk appetite (with the bulk of its lending
business being guaranteed by the parent bank), adequate capitalisation,
strong risk management and tight control from the parent. The key factor
constraining IBE's BFSR is the bank's modest franchise and narrow client
base, as the bank focuses on a small number of key corporate customers.
The BFSR is also constrained by the volatile nature of those bank's
earnings which are derived from inherently volatile operations on
financial markets. Moody's also notes that significant amount of market
risk taken by the bank, as well as high single-name concentrations
prevailing on both sides of IBE's balance sheet make the bank's financial
performance potentially volatile and weigh negatively on the D BFSR.
Moody's notes that at the current level the upside potential of IBE
ratings is limited by the bank's modest franchise, narrow client base,
absence of territorial coverage and volatile nature of its earnings. At
the same time, the bank's ratings are not likely to be negatively
affected either, given the bank's strong risk management function,
excellent asset quality and solid financial fundamentals, all of which
make negative rating developments unlikely.
IBE is headquartered in Moscow, Russia and as of 31 December 2007
reported total IFRS assets of US$3.4 million and net IFRS income of
US$59 million. |
