S&P keeps SME Bank on negative watch

Standard & Poor's said it maintained its CreditWatch placement on Russia-based SME Bank, where they were placed with negative implications on June 30.

S&P said the ratings remain on CreditWatch negative due to the lack of clarity regarding the details of the transfer of ownership of SME Bank.

The agency originally placed the ratings on CreditWatch negative based on the Russian government's decision to transfer SME Bank from the Vnesheconombank group to the new government-related entity, Federal Corp. for the Development of Small- and Medium-Sized Enterprises.

Vnesheconombank recently drafted a temporary agreement with the Federal Corp. under which the corporation will assume Vnesheconombank’s stake under trust management. This agreement is likely to be finalized by late October, and will indicate the extent to which SME Bank's status within the Vnesheconombank group will change once the ownership transfer has taken place.

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