Moody's downgrades Russia's Natixis Bank to Ba3, outlook stable
MOSCOW. June 19 (Interfax) - Moody's Investors Service has downgraded to Ba3 from Ba2 the long-term local and foreign-currency deposit ratings of
Natixis Bank (ZAO), the Russian subsidiary of Natixis, the sixth-largest French banking group, the ratings agency said in a press release.
The outlook on long-term ratings is stable.
The downgrade of Natixis Bank (ZAO)'s ratings was prompted by Moody's rating downgrade of the French parent bank Natixis to A2 deposits; BFSR D/ BCA ba2 from Aa3 deposits; BFSR D+/ BCA baa3, which, in turn, reflects Moody's assessment of the weakened capacity of Natixis to provide timely capital and funding support to the Russian subsidiary, in case of need.
The standalone bank financial strength rating (BFSR) of Natixis Bank (ZAO) was not affected.
The rating action on Natixis Bank (ZAO) concludes the review that Moody's initiated on 21 February 2012, when the ratings were placed on review for downgrade, following a similar rating action on Natixis.
The downgrade of Natixis Bank (ZAO)'s local and foreign-currency deposit ratings to Ba3, with a stable outlook, (from Ba2) was prompted by Moody's downgrade of Natixis' ratings.
Moody's says that the lowering of Natixis's standalone credit assessment to ba2 from baa3, announced on 15 June 2012, reflects the bank's vulnerability to the weakening operating environment. Under Moody's Joint Default Analysis methodology, the long-term ratings of the Russian subsidiary incorporate uplift from parental support assumptions; the two-notch lowering of Natixis' standalone credit assessment therefore has a direct impact on the ratings of the subsidiary.
Moody's continues to incorporate a parental support assumption in Natixis Bank (ZAO)'s Ba3 ratings, which results in one-notch of rating uplift from its b1 standalone credit assessment (mapped from the E+ standalone BFSR).
Moody's believes there is little likelihood of any upward movement in Natixis Bank (ZAO)'s ratings in the near-term, unless there is a material improvement in the operating environments of the bank's parent group. At the same time, Moody's notes that downward pressure could be exerted on Natixis Bank (ZAO)'s standalone rating by any material adverse changes in the bank's risk profile, particularly significant impairment of the bank's liquidity position, capitalisation and by any failure to maintain control over its asset quality. In addition, further downward pressure on Natixis' ratings could affect Natixis Bank (ZAO) (Russia)'s deposit ratings.
The bank was Russia's 150th largest by assets, according to the Interfax-100 ranking at the end of Q1 2012.
