Moody’s cuts Russian bank subsidiaries

Moody's Investors Service said it downgraded various ratings on Russian financial institutions that are subsidiaries of foreign banks: AO Raiffeisenbank, JSB Rosbank, ING Bank Eurasia, DeltaCredit Bank, Rusfinance Bank and Banca Intesa (Russia).

Moody's expects a prolonged recessionary environment in Russia resulting in a very challenging operating environment for the banks, impacting negatively their credit profiles. The agency thus lowered the standalone bank financial strength ratings of all but Rusfinance Bank, whose was maintained.

These actions also capture the weakening of Russia's credit profile, as reflected by the agency’s downgrade of Russia's government debt rating to Ba1 from Baa3, negative outlook, on Deb. 20, which prompted the lowering of the country's foreign-currency deposit ceiling to Ba2 from Ba1.

For all but two of the banks – Banca Intesa (Russia) and AO Raiffeisenbank – Moody's therefore downgraded their long-term foreign-currency deposit ratings, as they are constrained by the country's ceiling.

At the same time, the agency downgraded the supported senior unsecured, subordinated debt and local currency deposit ratings of all but Rusfinance Bank. These ratings incorporate the assessment of the parental support uplift that is derived from particular parent banks' ratings.

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