Moody’s cuts Petrocommerce to B2/Baa1.ru

Moody's Investors Service said it downgraded Petrocommerce Bank's long-term foreign- and local-currency deposit ratings and local-currency debt ratings to B2 from B1.

Concurrently, the bank's Not Prime short-term foreign and local-currency ratings were affirmed. Its standalone bank financial strength rating remains at E+ with a stable outlook, now equivalent to a baseline credit assessment of b2 (formerly b1).

The outlooks on all long-term ratings are stable.

At the same time, Moody's Interfax Rating Agency downgraded the national scale long-term deposit rating of Petrocommerce Bank to Baa1.ru from A2.ru. National scale ratings carry no specific outlooks.

Moody’s said the downgrade was driven by (a) Petrocommerce’s weak profitability stemming from recently high provisioning charges against problem loans; and (b) its deteriorated capital levels.

The agency’s assessment of the bank’s ratings is largely based on the announced sale of Petrocommerce to Otkritie Holding as well as the bank's audited financial statements for 2013.

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