Moody’s could cut Russian, Kazakhstani financials

Moody's Investors Service said it placed the ratings of various financial institutions domiciled in Russia and Kazakhstan on review for downgrade, due to a combination of likely further erosion in the operating conditions for the financial institutions and their parent entities as well as fiscal pressure on the governments in these countries.

The baseline credit assessments of the following entities were placed on review for downgrade: Halyk Savings Bank of Kazakhstan, AO Raiffeisenbank, Absolut Bank, Alfa-Bank, Sberbank, Asian-Pacific Bank, Bank Saint-Petersburg PJSC, Transkapitalbank, International Financial Club, RGS Bank, Vozrozhdenie Bank, Metallinvestbank JSCB, Eximbank of Russia, Center-Invest Bank, Commercial Bank, Agropromcredit, NBD Bank and DeltaCredit Bank.

The long-term ratings of the following entities were placed on review for downgrade due to government and affiliate support: Development Bank of Kazakhstan, DBK Leasing, House Construction Savings Bank of Kazakhstan JSC, Bank VTB, JSC, Alfa-Bank, Sberbank, VTB24, Agency for Housing Mortgage Lending JSC, SME Bank, SB Sberbank JSC, Fund of Financial Support for Agriculture, Eximbank of Russia, Russian Regional Development Bank, Far Eastern Bank, Bank of Moscow and Vnesheconombank.

Moody’s said the review of the baseline credit assessments reflects (a) The risk that prolonged oil prices will weaken the macro environment and overall operating conditions for the banks to a greater extent than currently assumed in the bank ratings; resulting in (b) potential pressure on operating revenues; (c) weakening customer creditworthiness and, thus, the asset quality of banks; and consequently (d) higher risk of losses and capital erosion.

The review for downgrade on the long-term ratings of sovereigns results from weakening economic and fiscal conditions which may reduce the creditworthiness of the public authorities, the agency added.

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