S&P ups nine Russian banks

Standard & Poor's said it took the following rating actions on nine Russian banks, reflecting improvements in their individual credit profiles backed by the growing economy in the Russian Federation (foreign currency, BBB-/stable/A-3; local currency, BBB/stable/A-3):

* The long- and short-term counterparty credit ratings on Vneshtorgbank were raised to BBB-/A-3 from BB+/B, outlook stable, and the subordinated debt rating was raised to BB+ from BB-.

* The long-term counterparty credit rating on International Moscow Bank was raised to BB from BB-, outlook positive.

* The long- and short-term counterparty credit ratings on Alfa Bank were raised to BB-/B from B/C, outlook stable, and the Russia national scale rating was raised to ruAA- from ruA+.

* The long- and short-term counterparty credit ratings on MDM Bank were raised to B+/B from B/C, outlook positive.

* The long-term counterparty credit rating on Bank Uralsib OJSC was raised to B from B-, outlook positive.

* The long-term counterparty credit rating on B.I.N. BANK was raised to B- from CCC+, outlook stable, and the Russia national scale rating was raised to ruBBB- from ruBB.

* The long-term counterparty credit rating on Ural Bank for Reconstruction and Development was raised to CCC+ from CCC, outlook stable.

* The outlook on OJSC Commercial Bank Petrocommerce was revised to positive from stable and its B/C ratings were affirmed.

* The Russia national scale rating on Promek-Bank was raised to ruBBB+ from ruB+ and removed from CreditWatch with positive implications, where it was placed on March 30, 2005.

Russian banks continue to benefit from positive macroeconomic trends, the government's strong financial position and the economy's high liquidity level, the agency said. This results in a growing level of financial intermediation, improving loan performance and higher profits from commercial and investment banking services.

Nevertheless, S&P said the Russian banking industry remains highly risky due to its limited ability to withstand external shocks. Negative rating factors continue to include significant risk concentration, an inefficient legal system, still-weak regulation and an undeveloped bank industry infrastructure.

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