Moody's downgrades Promsvyazbank

Moody's Investors Service said it downgraded Promsvyazbank's senior debt ratings to Ba3 from Ba2 and subordinated debt rating to B1 from Ba3. The outlook is stable.

The agency said the downgrade reflects the uncertainty related to the quality of a significant portion of the bank's corporate loan book, the bank's low level of loan loss reserves against impaired loans and the relatively thin level of tier 1 capital.

The stable outlook reflects the agency's opinion that the bank's financial fundamentals will remain close to their current levels in 2013 and 2014. Moody's said that despite the recent downward pressure on Promsvyazbank's net interest margin, its profitability remains solid and its liquidity profile is stable.

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