S&P downgrades Peresvet Bank

S&P said it lowered the long-term counterparty credit rating on Peresvet Bank to CCC- from B+ and its short-term counterparty credit rating to C from B.

The agency also said it lowered the Russia national scale rating to ruCCC- from ruA+.

All of the ratings were placed on CreditWatch with negative implications.

S&P also said it lowered the rating on Peresvet Bank's senior unsecured notes to CCC- from B+.

The downgrades follow Peresvet Bank's recent introduction of cash withdrawal limits for its retail clients, the agency said.

Customers can still access the full amount of their deposits using account transfers and the bank continues to process its customers' electronic payments, S&P noted. So, this is not treated as a selective default on deposit obligations, the agency said.

As of Oct. 18, Peresvet Bank had a liquidity buffer that could withstand a moderate level of stress and withdrawal of 10% of customer deposits, S&P said.

But the decision to limit cash withdrawals, along with increased media attention may, trigger a higher level of stress, resulting in the bank's ability to meet its obligations becoming dependent on additional liquidity support from the Bank of Russia, the agency explained.

This is why the agency said it revised downward the bank’s stand-alone credit profile to CC.

The watch reflect the bank’s vulnerability to shifts in the confidence levels of its depositors and creditors, S&P added.

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