Moody’s lowers Investment Trade Bank

Moody's Investors Service said it downgraded Investment Trade Bank's long-term global local and foreign currency deposit ratings to Caa3 from B3.

The agency also affirmed the Not Prime short-term local and foreign currency deposit ratings.

Concurrently, Moody's downgraded the bank's baseline credit assessment/Adjusted BCA to caa3 from b3 and long-term counterparty risk assessment to Caa2(cr) from B2(cr).

The short-term counterparty risk assessment of Not Prime(cr) was affirmed.

At the same time, Moody's Interfax downgraded the national scale long-term deposit rating to Caa3.ru from Baa2.ru.

All ratings were placed on review for further downgrade.

Moody's said the downgrade and further review follows the sharp deterioration in the bank's liquidity profile and its weakening capital buffer, which has been eroded by substantial losses in the first half of 2015.

Investment Trade Bank's liquidity buffer declined sharply to 7% of total assets as of Aug. 1 from 12% as of July 1, as reported under local GAAP. Furthermore, as cited by media sources, the bank has stated publically that in August 2015 it has experienced an outflow of deposits in the Ivanovo region, which exceeded RUB 2 billion.

Moody's considers the bank's current liquidity cushion may be insufficient to withstand a further material liquidity stress, given the volatility of its deposit funding.

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