Moody's downgrades Vostochny Express

Moody's Investors Service said it downgraded Vostochny Express Bank’s local-currency senior debt rating to B3 from B2. The outlook is negative.

Moody's Interfax Rating Agency downgraded the bank’s national scale rating to Baa3.ru from Baa1.ru.

The downgrades reflect a prolonged deteriorating trend in the bank's asset quality and profitability because of the heightened risks in the bank's unsecured consumer loan portfolio and its low capital buffer, which, coupled with substantial net IFRS losses posted in 2014 and insufficient coverage of non-performing loans by loan loss reserves, reveals overall weak loss-absorption capacity, the agency said.

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