Moody's could lift Absolut Bank

Moody's Investors Service said it placed on review for possible upgrade Absolut Bank's global scale ratings of Ba3 long-term and Not Prime short-term local- and foreign-currency deposit ratings and Ba3 long-term foreign-currency senior unsecured debt rating.

The D- bank financial strength rating was affirmed with stable outlook. Moody's Interfax Rating Agency placed the bank's Aa3.ru long-term national scale rating on review for possible upgrade.

The rating action follows the announcement by the Belgian KBC Group that it would acquire a 92.5% in the Absolut Bank for $925 million.

Moody's said that the review reflects the likelihood of parental support.

Moody's said the bank financial strength rating reflects the expectation that there will be no immediate effect of the acquisition on Absolut Bank's intrinsic financial strength. The rating is constrained by the operating and regulatory environment in Russia, the uncertainty relating to the bank's ability to increase its market share and the still concentrated nature of its loan portfolio, the agency said.

The rating is supported by the ongoing strengthening of the bank's franchise and its sound financial performance over recent years, Moody's said.

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