Moody's Takes Multiple Rating Actions on Russian Banks

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Moody's Bank Ratings: Moody's Takes Multiple Rating Actions on Russian Banks.

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Moody's Takes Multiple Rating Actions on Russian Banks

  1. 1. Moodys Takes MultipleRating Actions onRussian BanksApril 2, 2013 8:39am ETBy Sarka HalasMoody’s Bank Ratings: placed the long-term senior debt and depositratings of Russian banks on review for downgrade Tuesday, citing theRussian governments potentially reduced ability to support them ifneeded.
  2. 2. Moodys Investors Service placed the long-term senior debt and depositratings of Russian banks on review for downgrade Tuesday, citing theRussian governments potentially reduced ability to support them if needed.Sberbank (SBER.RS) rated A3, Bank VTB (VTBR.RS) rated Baa1, VTB24rated Baa1, and Russian Agricultural Bank rated Baa1 are all on review fordowngrade.Moodys said the risk of a decline in oil prices could affect the Russiangovernments ability to generate enough cash to help the countrys banks ifthey needed it. If the price of oil was to fall, the Russian government wouldalso be under pressure to support other entities such as large industrialcompanies and sub-sovereigns.Moodys however, expects high oil prices in 2013.
  3. 3. The ratings firm also cited the progress of the governments bankprivatization plans as reason for the review, seeing a risk over how willing thegovernment would be to provide systemic support to banks. Moodys said theprivatization plan could lead to the inclusion of market solutions regarding theprovision of support for large troubled banks, adding that Russian banks facerisks related to the euro-zone crisis, such as those recently highlighted bynegative developments in Cyprus.Moodys also put on review the subordinated debt ratings of six Russianbanks, including Gazprombank (GZPR.RS) and Alfa Bank among otherfinancial entities. The move was driven by its concerns that the risk profile ofjunior debt may have increased in Russia due to the global trends ofimposing losses on junior creditors as part of bank bailouts orchestrated bygovernments.Write to Sarka Halas at sarka.halasova@dowjones.com

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