Moody's lifts Sberbank to D

Moody's Investors Service said it upgraded Russia-based Sberbank's financial strength rating to D from D- and affirmed its Baa2/Prime-2 foreign-currency long- and short-term deposit ratings, its A2 ratings for senior and subordinated debt issued under foreign law and its Aaa.ru national scale rating.

The outlook remains stable.

The upgrade reflects Sberbank's track record of solid financial performance and improved efficiency of operations as reported under IFRS in 2005-2006, Moody's said. The bank's conservative funding profile and manageable asset quality have also supported the rating action, the agency said, adding that Sberbank continues to dominate the Russian banking sector with market shares in terms of total assets, corporate lending and retail deposits at 26.5%, 32.2% and 54.2%, respectively.

However, Moody's said, if a continued gradual decline of market share is not accompanied by improvement in efficiency, negative pressure on the financial strength rating may occur.

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