Moody's lowers some Russian banks

Moody's Investors Service said it downgraded the local currency deposit ratings of eight Russian banks and the issuer rating of one government-owned mortgage lender, the Agency for Housing Mortgage Lending.

All ratings remain investment grade, the agency said, adding that the foreign currency deposit ratings of seven banks were affirmed while the foreign currency deposit rating of Gazprombank and issuer ratings of AHML were downgraded.

According to the rating agency, with the exception of the Bank of Moscow, the outlooks on the other banks' local and foreign currency debt and deposit ratings are stable; for the Bank of Moscow's ratings, the outlook was changed to negative from stable.

Moody's said it affirmed the bank financial strength ratings of all eight banks, but changed the outlooks on the BFSRs to negative from stable for all the banks except for Russian Agricultural Bank, where it was changed to stable from positive, and for Vnesheconombank, where the outlook remained unchanged at stable.

Moody's noted that its rating actions reflect the increasingly negative impact of the global economic crisis on the Russian economy and on the intrinsic strength of its financial institutions.

Despite the large number of local currency rating downgrades, Moody's said it affirmed the majority of these financial institutions' foreign currency deposit ratings given that the latter were already constrained by Russia's foreign currency deposit ceiling.

Affected ratings include:

Sberbank's BFSR: affirmed at D+ (mapping to Baseline Credit Assessment of Ba1), outlook change to negative from stable; local currency deposit ratings: downgraded to A3/P-2 from A1/P-1; foreign currency deposit ratings: affirmed at Baa1/P-2; senior unsecured foreign currency debt rating: downgraded to A3 from A2; subordinated foreign currency debt ratings: downgraded to Baa1 from A2; the local currency deposit rating benefits from a very high systemic support probability that results in a four-notch uplift from the Baseline Credit Assessment of Ba1; and the outlook is stable;

Russian Agricultural Bank's BFSR: affirmed at E+ (mapping to Baseline Credit Assessment of B1), outlook changed to stable from positive; local currency deposit ratings: downgraded to Baa1/P-2 from A3/P-1; foreign currency deposit ratings: affirmed at Baa1/P-2; senior unsecured local and foreign currency debt rating: downgraded to Baa1 from A3; subordinated foreign and local debt ratings: downgraded to Baa2 from Baa1; the local currency deposit rating benefits from a very high systemic support probability that results in a six-notch uplift from the Baseline Credit Assessment of B1; and the outlook is stable;

Bank of Moscow's BFSR: affirmed at D (mapping to Baseline Credit Assessment of Ba2); long-term local currency deposit ratings: downgraded to Baa1 from A3; foreign currency deposit ratings: affirmed at Baa1/P-2, senior unsecured local and foreign currency debt rating: downgraded to Baa1 from A3; subordinated foreign and local debt ratings: downgraded to Baa2 from Baa1; the local currency deposit rating benefits from a very high probability of support from the City of Moscow and a very high systemic support probability that results in a four-notch uplift from the Baseline Credit Assessment of Ba2; and the outlook was changed to negative from stable; and

Gazprombank's BFSR: affirmed at D- (mapping to Baseline Credit Assessment of Ba3); outlook changed to negative from stable; long-term local currency deposit ratings: downgraded to Baa2 from A3; foreign currency deposit ratings: downgraded to Baa2/P-2 from Baa1/P-2; senior unsecured local and foreign currency debt rating: downgraded to Baa2 from A3; the local currency deposit rating benefits from a very high probability of support from Gazprom and a very high systemic support probability that result in a four-notch uplift from the Baseline Credit Assessment of Ba3; and the outlook is stable.

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