Moody’s might drop Promsvyazbank

Moody's Investors Service said it placed Promsvyazbank's Ba3 long-term local- and foreign-currency deposit ratings, its Ba3 senior unsecured debt ratings, B1 subordinated debt rating and standalone D- bank financial strength rating on review for downgrade.

Concurrently, the agency placed the provisional Ba3 foreign-currency rating on Promsvyazbank’s senior unsecured medium-term notes program and the provisional B1 foreign-currency rating on its subordinated medium-term notes program on review for downgrade.

Moody’s said the action was triggered by: (a) The negative trends in Promsvyazbank's asset quality and earnings-generating capacity in the second half of 2013 and first quarter of 2014; and (b) the bank's relatively weak loss-absorption buffer, as reflected in its modest capital cushion and low loan loss reserves compared to the volume of problem loans.

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