The credit ratings service at international rating agency Standard & Poor's has downgraded Bank Intercommerz's long-term and short-term foreign currency and local currency counterparty credit ratings from B-/C to R/R (under regulatory supervision), and also its national scale rating from ruBBB- to R, the agency said in a press release.
S&P noted that on January 29, 2016 the Bank of Russia appointed temporary administration for Bank Intercommerz for six months and suspended the powers and authority of the bank's executive bodies. Rating actions taken today reflect the rating agency's opinion about the regulatory risk as the Bank of Russia interfered with operations carried out by Bank Intercommerz. The agency thinks that this is a sign that the bank is in a bind and may find it difficult to service and settle its obligations," S&P noted in a press release.
Analysts specified that, in their opinion, under a similar scenario the Bank of Russia or the Deposit Insurance Agency (DIA) may name as priority the bank's obligations against other obligations or suspend the repayment of obligations. Further rating actions will mainly depend on the Bank of Russia's subsequent decisions and the agency's viewpoint about the bank's development prospects in terms of its business profile and financial indicators upon receipt of relevant information, the agency said in the press release.
S&P pointed out that, as the analysis of similar cases shows, further developments at a bank, at which temporary administration rolled up its sleeves, suggest complete or partial sale of its assets to a strategic investor, possible assistance to the bank using funds of creditors, the assignment of the bank for long-term management as part of a rehabilitation program with the participation of DIA or the shutdown of the bank if its business model turns out to be unviable.
At present, it is unclear how the situation surrounding the introduction of temporary administration at the bank will unfold. The agency will continue to monitor the Bank of Russia's actions with regard to Bank Intercommerz, analysts said.
