Moody's Takes Multiple Rating Actions on Russian Banks by alexholt1986

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Moody's Takes Multiple Rating Actions on Russian Banks

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									Moody's Takes Multiple
  Rating Actions on
   Russian Banks
                        April 2, 2013 8:39am ET
                            By Sarka Halas

Moody’s Bank Ratings: placed the long-term senior debt and deposit ratings
 of Russian banks on review for downgrade Tuesday, citing the Russian
   government's potentially reduced ability to support them if needed.
Moody's Investors Service placed the long-term senior debt and deposit ratings
of Russian banks on review for downgrade Tuesday, citing the Russian
government's potentially reduced ability to support them if needed.

Sberbank (SBER.RS) rated A3, Bank VTB (VTBR.RS) rated Baa1, VTB24 rated
Baa1, and Russian Agricultural Bank rated Baa1 are all on review for
downgrade.

Moody's said the risk of a decline in oil prices could affect the Russian
government's ability to generate enough cash to help the country's banks if they
needed it. If the price of oil was to fall, the Russian government would also be
under pressure to support other entities such as large industrial companies and
sub-sovereigns.

Moody's however, expects high oil prices in 2013.
The ratings firm also cited the progress of the government's bank privatization
plans as reason for the review, seeing a risk over how willing the government
would be to provide systemic support to banks. Moody's said the privatization
plan could lead to the inclusion of market solutions regarding the provision of
support for large troubled banks, adding that Russian banks face risks related to
the euro-zone crisis, such as those recently highlighted by negative developments
in Cyprus.

Moody's also put on review the subordinated debt ratings of six Russian banks,
including Gazprombank (GZPR.RS) and Alfa Bank among other financial
entities. The move was driven by its concerns that the risk profile of junior debt
may have increased in Russia due to the global trends of imposing losses on
junior creditors as part of bank bailouts orchestrated by governments.

Write to Sarka Halas at sarka.halasova@dowjones.com

								
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