S&P puts Sogaz, VTB Finance on watch

S&P said it placed the BBB- long-term issuer credit and financial strength ratings on OJSC Sogaz and VTB Insurance on CreditWatch with developing implications.

The CreditWatch placement follows the acquisition by Sogaz of 100% of VTB Insurance from Russian banking group, VTB, S&P explained.

The agency said it now considers VTB Insurance to be core to Sogaz, implying the ratings on VTB Insurance have been aligned and will now move in tandem with Sogaz's group's credit profile.

Sogaz will maintain its exclusive agreement with VTB Group to sell insurance products via the bank's extensive branch network, S&P said.

As part of the transaction, VTB Group received a 10% share in Sogaz, S&P said.

The acquisition will complement Sogaz's portfolio, the agency said.

The combined entity will have a stronger market position in terms of earnings and competitive standing, which will benefit the Sogaz group's credit profile, S&P said.

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