International rating agency Moody's Investors Service has raised long-term local currency and foreign currency deposit ratings assigned to Cherepovets-based Metcombank from B2 to B1, the agency said in a press release Thursday. The outlook for the bank's long-term deposit ratings is stable.
The bank's Baseline Credit Assessment (BCA) was affirmed at b2, and adjusted BCA was raised from b2 to b1. Moreover, the agency lifted Metcombank's long-term Counterparty Risk Assessment (CRA) from B1(cr) to Ba3(cr) and affirmed short-term CRA at Not Prime(cr), while the bank's short-term deposit ratings were affirmed at Not Prime.
The agency expects the lending institution to complete its takeover by Sovcombank, its parent company, within the next three months and cease operations are a standalone company, and all its obligations will go to Sovcombank. Moody's reiterated that Sovcombank closed the purchase of a 100% stake in Metcombank in October 2016, and the banks announced a merger on December 15, and the procedure should be wrapped up by April 1, 2017.
In the run-up to the merger Moody's put Metcombank's deposit rating at a level equal to Sovcombank's, and the subsidiary's rating takes into account high odds of support from the parent bank. As a result, it turned out to be one notch higher than its own credit rating, analysts noted.
