Moody’s cuts International Financial Club deposits

Moody's Investors Service said it downgraded International Financial Club's long-term local- and foreign-currency deposit ratings to Caa1 from B3 and affirmed its Not Prime short-term deposit ratings.

Concurrently, the agency downgraded the baseline credit assessment (BCA) and adjusted BCA to caa1 from b3.

Moody's also downgraded the bank's long-term counterparty risk assessment to B3(cr) from B2(cr) and affirmed its short-term counterparty risk assessment of Not Prime(cr).

All long-term deposit ratings carry a developing outlook.

Moody's said the downgrade of the BCA to caa1 was driven by International Financial Club's very weak solvency metrics.

“Its higher-than-expected credit costs and losses from consolidation of troubled Bank Tavricheskiy exerted additional pressure and wiped the bank's equity to a negative RUB 8.5 billion as at year-end 2016, while the capital support provided by the bank's shareholders in recent months was not sufficient to restore the bank's consolidated capital position to the level commensurate with B-rated peers,” the agency said in a news release.

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