Moody's Investors Service has cut its long-term foreign currency and local currency deposit ratings on SB Bank from B3 to Caa1, the international rating agency said in a press release. The ratings were placed on review for a possible downgrade.
At the same time, the lender's BFSR was cut from E+ to E, and short-term ratings were affirmed at Not Prime.
Analysts say that pressure on the bank's liquidity is the key factor behind the rating actions.
Moreover, the National Rating Agency also lowered the bank's national scale creditworthiness rating to B-, reiterating a negative outlook.
The rating agency pointed to the bank's deteriorating liquidity, a contraction in required and estimated ratios and continuing delays in processing clients' payments. In line with the bank's financial statement as of January 1, 2015, there was an outflow of clients' funds in the second half of December 2014, a drop in the balances held on the CBR's correspondent account, higher NPLs and some movement in unfulfilled accounting documents.
The substantial negative revaluation of the securities portfolio and an operating loss suffered by the bank in 2014 have put pressure on the capital adequacy ratio which carries the risks associated with the loss of capital stability given the need to pile up additional provisions against the credit portfolio. The agency also pointed out that the bank has nearly completed exhausted internal liquidity sources, while its ability to draw short-term funding on the market is presently limited.
Previously SB Bank restricted the provision of retail deposits, set limits on cash withdrawals through ATMs and cash desks, and suspended the opening of new retail deposits.
Twice in less than a week rating agency Expert RA lowered the bank's ratings, first from A to В++, then from В++ to B (the satisfactory creditworthiness rating) with a developing outlook.
