International rating agency Standard & Poor's has cut Nota-Bank's long-term and short-term counterparty credit ratings from B/B to R/R, and the bank's national scale rating from ruBBB+ to R. The ratings were removed from watch after gaining this status on September 25, 2015 with a negative outlook.
As the agency's analysts pointed out, the bank's rating downgrade reflects the regulatory risk associated with the Bank of Russia's interference and the moratorium imposed on all the bank's credit obligations amid its financial problems in the past few months. S&P assesses the Russian regulator's actions as a sign that the bank is unable to fulfill its obligations due to an outflow of liquidity. To remind, on October 13, 2015 the Central Bank of Russia ruled to appoint a temporary administration at Nota-Bank for six months in order to assess its asset quality, analysts noted.
They also do not rule out that the bank can violate CBR-set liquidity ratios. The agency thinks that Nota-Bank's liquidity indicators continued to deteriorate in September, and by October 1, 2015 the bank's highly liquid assets (as defined by the Russian regulator) declined to under Rub 5 bln. The agency pointed out that Nota-Bank exercised on October 6, 2015 a put option on bonds, but it thinks that the lending institution will not be able to execute its obligations under the next put option of Rub 1.5 bln on October 19, 2015.
