International rating agency Moody's Investors Service affirmed on Tuesday its ratings on 26 Russia-based financial institutions.
Specifically, the agency affirmed BCAs of Sberbank, Roseximbank, Alfa Bank, Raiffeisenbank, DeltaCredit, Absolut Bank, Bank St. Petersburg, Bank Vozrozhdenie, Center-Invest, NBD-Bank, Transcapitalbank, Rosgosstrakh Bank, Agropromcredit, Metallinvestbank, IFC Bank.
The primary factor which determined BCA affirmation of these 15 banks is resistance that the Russian economy demonstrated to a continuing decline in oil prices earlier in the year, Moody's noted. The agency's analysts think that oil price volatility would produce no extra long-term and substantial impact on the economy, inflation or financial stability.
After Russia's rating was affirmed at Ba1 on April 22, 2016, the country's macro profile of Weak+ is sustained. The agency believes that presently BCA of these banks reflect their ability to absorb an expected drop in the asset quality and slower growth. Moody's forecasts for a second straight year a recession in Russia, with GDP falling 1.5%, and this would affect creditworthiness of banks' customers and exert an adverse impact on the asset quality and profit of banks after reserves are piled up. However, this pressure would be partly offset by the banking system's rising capitalization following a drop in balance sheet items and an injection of Rub 1 tln into banks that were included in the government's banking sector support program. As Moody's thinks, additional capital needs are limited at the moment taking into account very modest expected numbers and a decrease in the banking system's risk-weighted assets.
The agency also affirmed (in some cases, given the possibility of government support, as the Moody's press release shows) long-term ratings assigned to Sberbank, VTB Bank, VTB 24, Vnesheconombank, SME Bank, Roseximbank, the Agency for Housing Mortgage Lending, Alfa Bank, Raiffeisenbank, DeltaCredit, Absolut Bank, Bank St. Petersburg, Bank Vozrozhdenie, Center-Invest, NBD-Bank, Transcapitalbank, Rosgosstrakh Bank, Agropromcredit, Metallinvestbank, and IFC Bank.
Meanwhile, VTB 24, SME Bank and Roseximbank had their adjusted BCA lowered.
Foreign currency deposit ratings assigned to Rosselkhozbank, Gazprombank, ING Bank, Natixis Bank, Rosbank and Rusfinance Bank were affirmed due as Russia's country ceiling remained unchanged.
