Moody’s downgrades MTS Bank, debt

Moody's Investors Service said it downgraded the long-term local- and foreign-currency deposit ratings of MTS Bank PJSC to B3 from B2.

The outlook is negative.

At the same time, the agency downgraded the bank's baseline credit assessment to caa1 from b3 and the adjusted baseline credit assessment to b3 from b2.

It also downgraded MTS Bank's subordinated debt rating to Caa1 from B3 and its long-term counterparty risk (CR) assessment to B2(cr) from B1(cr). The Not-Prime local- and foreign-currency short-term deposit ratings, as well as the Not-Prime(cr) short-term CR assessment, were affirmed.

Moody's said its assessment of MTS Bank's ratings is based primarily on the bank's audited financial statements for 2014, unaudited financial statements for the first half of 2015 prepared under IFRS, unaudited financial statements for 2015 year-to-date prepared under local GAAP, as well as information received from the bank.

The downgrade of the baseline credit assessment to caa1 from b3 reflects the bank’s weak standalone financial metrics and insufficient loss-absorption capacity without external support from the bank's shareholders, the agency said.

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