International rating agency Standard & Poor’s has lowered its national scale rating on Rost Bank from CCC+ to R.
The rating downgrade reflects the regulatory risk associated with the Bank of Russia’s interference with the operation of Rost Bank and could impose a moratorium on a number of its claims, S&P said in a press release. A borrower rated at R is under supervision of state regulatory authorities due to the unsatisfactory financial standing, S&P noted.
For the record, on November 28, 2014 the Bank of Russia announced the beginning of a rehabilitation procedure at Rost Bank, and also at affiliated Akkobank, Bank Kedr, SKA-Bank and TverUniversalBank. The regulator decided so due to the threat to the interests of the bank’s creditors and deposit holders. The State Depositary Insurance Agency (DIA) acts as the bank’s temporary administration.
The rating agency’s analysts think that there is a likelihood that the regulator could mark some of the bank’s liabilities as top priority against other liabilities. For this reason Rost Bank’s ratings were cut to R.
S&P forecasts that Rost Bank would get financial aid from DIA to stabilize and solidify its capitalization and would take measures to rehabilitate the bank’s credit portfolio. All subsequent rating actions with regard to Rost Bank would depend on the nature and the scope of rehabilitation procedures, the rating agency noted.
