Promsvyazbank comments on rating outlook change by Moody’s16.03 | 2009
On 16 March 2009, Moody’s Investors Service changed the outlook on Promsvyazbank’s (PSB) ratings to negative from stable. The level of ratings remained unchanged at “D” bank financial strength rating, “Ba2” long-term global local and foreign currency deposit ratings and senior unsecured debt rating, and “Ba3” subordinate debt rating. The negative outlook means that Moody’s sees a possibility for lowering PSB’s ratings within the next year provided that there is a “material weakening” of the Bank’s ability (i) to maintain satisfactory financial fundamentals - in particular asset quality and liquidity - against a background of worsening economic scenarios and (ii) to raise new capital, when needed. This is in line with the recent actions by Moody’s regarding ratings of some of Russia’s largest banks. The rating agency’s decision reflects its concerns about the potential impact of the enduring economic downturn in Russia on PSB “asset quality and financial performance which is likely to exert further negative pressure on the bank’s capital levels”, said the rating agency. At the same time, Moody’s notes PSB’s satisfactory credit underwriting standards; a currently reasonable capital adequacy; an acceptable level of liquidity, with the portion of liquid assets comprising approximately a quarter of the total balance sheet; sufficiently diversified funding sources; and well-matched assets’ and liabilities’ maturities. “The previous rating action by Moody’s dates back to May 2008”, says Andrey Naumenko, Head of Investor Relations at PSB. “Certainly, the Russian operating environment has since deteriorated and rating agencies have to reflect this in their ratings across economic sectors. Currently, the agencies are monitoring all major Russian banks for possible downward rating adjustments, and the mere fact that PSB’s ratings remained unchanged is a sign of its financial robustness”. PSB management assures its clients and investors that the Bank currently maintains a strong liquidity position. Ample liquidity allowed PSB to repay US$ 200 million syndicated loan in December 2008 with no recourse to external financing, and in Q1 2009 prepay uncollateralized CBR funds as well as a US$175 million syndicated loan. PSB feels confident about timely meeting all of its obligations falling due in 2009. PSB has also adopted a wide range of measures to address the problem of deteriorating asset quality in the worsened operating environment, and has a proven track record of external capital contributions which is expected to continue in 2009. ____________________________________________________________________________________________________________________ About Promsvyazbank OJSC Promsvyazbank, founded in 1995, is one of the leading privately-owned Russian banks, with total assets of RUB407.6 billion, and total capital of RUB46.7 billion under IFRS as of 30 September 2008. Holding company Promsvyaz Capital B. V. owns 84.68% of the Bank, the remaining 15.32% are owned by Commerzbank Auslandsbanken Holding AG, a subsidiary of the second-largest German bank Commerzbank AG. PSB has the following international credit ratings: “Ba2” from Moody’s Investors Service (negative outlook); “BB-” from Standard & Poor's (negative outlook); “B+” from Fitch Ratings (stable outlook). As of 1 February 2008, the regional network of the Bank in Russia encompassed about 170 sub-branches, 48 branches and 1 representative office; a foreign branch in Cyprus; and foreign representative offices in Kyrgyz Republic, Ukraine, China, and India. ____________________________________________________________________________________________________________________
 |
© 2009 