12 October 2003 17:11
RUSSIA: MOODY`S ASSIGNED RATING FOR SBERBANK
Moody's Investors Service has assigned Ba1/NP foreign currency deposit ratings and a D- Financial Strength
Rating (FSR) to Russia's Sberbank. All ratings carry stable outlooks. Moody's has also assigned Baa3 rating to
the upcoming issue of loan participation notes issued by UBS (Luxembourg) S.A. on limited-recourse basis for the sole
purpose of financing a loan to Sberbank. The notes will be denominated in US dollars and the loan represents a senior
unsecured claim on Sberbank. The outlook for the rating is also stable. The Ba1/NP deposit ratings, as well as the Baa3
rating of senior unsecured notes, are placed at the country ceilings for such ratings in Russia and are based solely on
the issue of expected support in case of crisis, resulting from the bank's importance to the banking system as
whole and from majority state ownership. Sberbank is the Russia's largest bank in asset terms, controlling over a
quarter of total country's banking assets. More importantly, it is the dominant collector of retail deposits in
Russia, controlling nearly 2/3 of the market as of June 2003. According to Moody's, Sberbank's D- FSR reflects
on the positive side the bank's (i) strong franchise that is supported by an unmatched countrywide network of
branches and banking outlets; (ii) dominant position in the retail deposit market; (iii) relatively low concentrations
on both sides of the balance sheet; and (iv) good financial standings, namely good reported asset quality and strong
provision coverage, good profitability, strong liquidity ratios and adequate capitalisation. Moody's added that the
FSR is constrained by concerns over (i) infrequent and insufficient financial disclosure under International Accounting
Standards (once a year); (ii) possibility for politically-motivated decisions; (iii) the bank's evolving corporate
governance; (iv) challenges to day-to-day management of the vast branch network; and (v) the bank's dominant
position in retail deposit market being boosted by a government guarantee. In addition, Russia's still potentially
volatile operating environment remains one of the constraints on Sberbank's ratings. At the same time, Moody's
believes that the bank's ratings are sustained by gradually improving economic conditions in the country. Sberbank
is headquartered in Moscow, Russia and reported total IAS-consolidated assets of RUB1.1 trillion (US$34.2 billion) at 31
December 2002.
[AIW [Asia Africa Intelligence Wire]] |
RUSSIA IN FACTS
