Moody's lowers outlook to negative on Rosbank, DeltaCredit, Rusfinance ratings
LONDON. Nov 25 (Interfax) - International ratings agency Moody's Investors Service lowered the outlook on Tuesday on the ratings of three Russian Societe Generale subsidiaries - Rosbank , Rusfinance Bank and DeltaCredit to negative from stable.
"The change of outlook on these ratings reflects the risk that pressure will develop on the Russian banks' loss-absorption capacity, asset quality and profitability, because of (1) the deteriorating operating environment in Russia (Baa2 negative) driven by the crisis in Ukraine (Caa3 negative); (2) the slowdown of the Russian economy (Moody's estimates GPD growth of 0.5% for 2014 and a GDP contraction of 1% for
2015); and (3) capital flight and restricted access to global wholesale markets for Russian issuers," Moody's said in a press release.
The agency expects Russian GDP to grow 0.5% in 2014 before falling 1% in 2015.
"Concurrently, the rating agency changed the outlook to negative from stable on DeltaCredit Bank's and Rosbank's BFSRs of D (equivalent to a ba2 BCA) and affirmed Rusfinance Bank's BFSR of E+ (equivalent to a b1 BCA, stable outlook) and the long-term deposit and senior unsecured and backed ratings of the three Russian subsidiaries," the press release says.
"Moody's maintains its view of a high probability of support from Societe Generale to the three Russian subsidiaries, because of the strategic importance of its Russian operations to the group, shared reputation risks and track record of capital and liquidity support. These assumptions result in a two-notch uplift for Rosbank's and DeltaCredit Bank's Baa3 debt and deposit ratings from their standalone BCAs of ba2, and three-notches of uplift for Rusfinance Bank's Ba1 debt and deposit ratings from its standalone BCA of b1," it says.
Rosbank was Russia's 12th largest bank by assets at the end of 9M 2014, DeltaCredit was 51st and Rusfinance was 61st, according to the Interfax-100 ranking.
