Moody’s cuts Russian International Bank

Moody's Investors Service said it downgraded Russian International Bank's long-term local and foreign-currency deposit ratings to Caa2 from B3 and changed the outlook to negative from stable.

The changes reflect the recent weakening of the bank's asset quality and earnings generation capacity, as well as downside risks to its capital position.

The agency also downgraded Russian International Bank's baseline credit assessment (BCA)/adjusted BCA to caa2 from b3 and its long-term counterparty risk assessment to Caa1(cr) from B2(cr).

Concurrently, Moody's affirmed the bank's Not Prime short-term local and foreign-currency deposit ratings and its Not Prime(cr) short-term counterparty risk assessment.

“Today's downgrade is driven by the recent deterioration in Russian International Bank's asset quality, its loss-making performance and weakening of the bank's liquidity position,” Moody’s said in a news release.

“Moody's expectations that the bank's capital adequacy ratios (regulatory Tier 1 ratio of 8.8% as of 1 May 2017) will be pressured by a need for additional substantial loan loss provisions in the next 12-18 months drive the negative outlook on the ratings.

“Given the insufficiency of the bank's pre-provision income to absorb its potential credit losses, Russian International Bank will have to rely on capital injections from its shareholders to remain solvent,” the agency added in the release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.