Moody's places Promsvyazbank on review for downgrade
LONDON. July 9 (Interfax) - Moody's Investors Service has placed on review for downgrade Promsvyazbank's Ba3 long-term local- and foreign-currency deposit ratings, its Ba3 senior unsecured debt ratings, B1 subordinated debt rating and standalone D- bank financial strength rating (BFSR), the rating agency said in a press release on Wednesday.
The rating action was triggered by negative trends in Promsvyazbank's asset quality and earnings-generating capacity in H2 2013 and Q1 2014; and the bank's relatively weak loss-absorption buffer, as reflected in its modest capital cushion and low loan loss reserves compared to the volume of problem loans, Moody's said.
Moody's review will seek to obtain greater clarity on Promsvyazbank's ability to raise new capital over the next three months as planned, the bank's asset quality dynamics, and sustainability of its earnings-generating capacity.
"Promsvyazbank's Not-Prime short-term local- and foreign-currency deposit ratings are not affected by this review and remain unchanged," the press release says.
Promsvyazbank was the 10th biggest Russian bank by assets as of the end of the first quarter of 2014 according to the Interfax-100 ranking compiled by the Center for Economic Analysis.