PARIS (Standard & Poor's) Oct. 10, 2008--Standard & Poor's Ratings Services
said today that it revised its outlooks on the long-term ratings on 13 Russian
financial institutions to negative from stable. In addition, the long-term
ratings on all the banks and financial companies were affirmed, and the Russia
national scale ratings on four of the affected entities were lowered. We also
affirmed the ratings on 14 other entities, on which the outlooks remain stable
(see Ratings List below).
"The outlook revisions reflect our growing concerns about the adverse
impact of the ongoing domestic and international market turbulence with regard
to the financial and commercial fundamentals of many domestic financial
institutions," said Standard & Poor's credit analyst Ekaterina Trofimova.
These relate to growing credit risks; tighter liquidity; pressured refinancing
and weaker short-term growth prospects; and reduced profitability, namely due
to trading losses.
A positive development is that the Russian government seems increasingly
willing to pursue orthodox measures to address the financial market turmoil.
Key support measures include plans to provide banks with up to $38 billion in
long-term subordinated loans, direct uncollateralized lending from the central
bank to about 100 banks, a $50 billion package to refinance corporate and
banks' foreign borrowings, and a substantial increase in borrowing limits from
the Ministry of Finance. However, the continued tough and volatile macro
environment and institutional weakness in Russia make their outcome
unpredictable, particularly in respect of domestically owned private sector
banks.
"We expect that higher funding costs and reduced access to the debt
markets will continue to put pressure on banks, especially the small and
midsize ones and those which have sizable amounts of debt maturing in the
coming months," said Ms. Trofimova. Credit is likely to become scarcer, which
will have a negative impact on the asset quality of borrowers and growth
dynamics of the Russian economy. On the funding side, corporate depositors
will use their cash to repay debt coming due while retail depositors might
consider a flight to quality. However, with the interbank market being closed
for many small banks, and with lines being cut by their larger peers and
higher interest rates, there could be a dash for cash and more banks may
experience liquidity problems. This is likely to be exacerbated by the extreme
risk aversion of the international debt markets, particularly as sizable debt
refinancing needs to take place during the coming 12 months. As a knock-on
impact, asset quality may then start to suffer as a credit squeeze will
prevent corporate borrowers financing their own projects and investments.
For a more in-depth analysis on the impact of the ongoing liquidity
squeeze and stock market turbulence in Russia's banking sector, please see the
article "Financial Turbulence Tests Resilience Of Russian Banks And State
Support For Banking Sector," published on RatingsDirect on Sept. 22, 2008.
We maintain a stable outlook on several state and foreign-owned banks
that are less vulnerable to the difficult operating environment due to
positive ownership factors. These include the state-owned Bank VTB and
Gazprombank and foreign-owned Raiffeisenbank ZAO, CJSC Unicredit Bank
(Russia), Rosbank OJSC, and Rusfinance Bank. In addition, we maintain stable
outlooks on banks with very low ratings, which already incorporate a high
degree of vulnerability to an adverse operating environment.
Standard & Poor's lowering of the Russia national scale ratings on four
Russian financial institutions reflects the more granulated credit rating
approach under our national ratings scale.
RATINGS LIST
To From
Troika Dialog Group Ltd.
Counterparty Credit Rating
BB-/Negative/B BB-/Stable/B
Russia National Scale ruAA- ruAA-
Bank URALSIB (OJSC)
Counterparty Credit Rating
BB-/Negative/B BB-/Stable/B
Promsvyazbank OJSC
Counterparty Credit Rating
BB-/Negative/B BB-/Stable/B
Bank Vozrozhdenie
Counterparty Credit Rating
BB-/Negative/B BB-/Stable/B
Russia National Scale ruAA- ruAA-
OJSC Alfa-Bank.
Counterparty Credit Rating
BB/Negative/B BB/Stable/B
Russia National Scale ruAA ruAA
MDM Bank
Counterparty Credit Rating
BB/Negative/B BB/Stable/B
Home Credit and Finance Bank LLC
Counterparty Credit Rating
B+/Negative/B B+/Stable/B
Commercial Bank Petrocommerce (OJSC)
Counterparty Credit Rating
B+/Negative/B B+/Stable/B
Russia National Scale ruA ruA+
National Factoring Company
Counterparty Credit Rating
B-/Negative/C B-/Stable/C
Russia National Scale ruBBB- ruBBB
Investment Company Veles Capital LLC
Counterparty Credit Rating
B-/Negative/C B-/Stable/C
Russia National Scale ruBBB- ruBBB
CentroCredit Bank JSC
Counterparty Credit Rating
B-/Negative/C B-/Stable/C
Russia National Scale ruBBB- ruBBB-
West Siberian Commercial Bank
Counterparty Credit Rating
B/Negative/C B/Stable/C
Russia National Scale ruBBB+ ruA-
B.I.N.BANK
Counterparty Credit Rating
B/Negative/C B/Stable/C
Russia National Scale ruBBB ruBBB
Ratings Affirmed
Aljba Alliance
Counterparty Credit Rating B-/Stable/C
Bank of Khanty-Mansiysk (JSC)
Counterparty Credit Rating BB-/Stable/B
Russia National Scale ruAA-
JSC VTB Bank
Counterparty Credit Rating BBB+/Stable/A-2
Russia National Scale ruAAA
Bank VTB 24
Counterparty Credit Rating BBB+/Stable/A-2
Russia National Scale ruAAA
VTB-Leasing
Counterparty Credit Rating BBB+/Stable/A-2
Russia National Scale ruAAA
Gazprombank
Counterparty Credit Rating BBB-/Stable/A-3
Russia National Scale ruAA+
International Industrial Bank
Counterparty Credit Rating BB-/Stable/B
Krayinvestbank
Counterparty Credit Rating B/Stable/C
Russia National Scale ruA-
Raiffeisenbank ZAO
Counterparty Credit Rating BBB+/Stable/A-2
Russia National Scale ruAAA
Rosbank OJSC
Counterparty Credit Rating BB+/Stable/B
Rusfinance Bank
Counterparty Credit Rating BB+/Stable/B
Surgutneftegasbank
Counterparty Credit Rating B+/Stable/B
TransCreditBank
Counterparty Credit Rating BB/Stable/B
Russia National Scale ruAA
CJSC Unicredit Bank (Russia)
Counterparty Credit Rating BBB+/Stable/A-2
N.B.--This list does not include all ratings affected. |
