22 April 2004 01:45
Fitch downgrades Bank Menatep St. Petersburg to `CCC+`
LONDON/MOSCOW. April 22 (Interfax) - Fitch Ratings has downgraded the Long-term rating of Russia's Bank Menatep
St. Petersburg (MSPB) to 'CCC+' from 'B-' and its Short-term rating to 'C' from
'B'. The Outlook for the Long-term rating remains Negative, Fitch said in a press release Thursday.
The rating actions reflect the agency's heightened concerns over the potential impact of the escalating
"Yukos affair", highlighted by the recent court order banning Russian oil major Yukos from selling assets
pending the outcome of a $3.5 billion tax claim against the company, on MSPB's reputation and financial standing.
MSPB is ultimately majority-owned by Group Menatep, which also holds a substantial stake in Yukos.
MSPB's management has responded sensibly to the pressure being
experienced by the Menatep group, notably by boosting its liquid
MSPB was established in 1995 and a subsidiary of the Moscow-based
Bank Menatep until the collapse of its parent in the 1998 Russian
MSPB receives a substantial amount of funding from Menatep Group companies, including Yukos, and Fitch believes the
worsening of Yukos' liquidity position could have a knock-on effect on the stability of MSPB's funding base
and liquidity. The reputational impact of the deepening Yukos/Menatep crisis could also result in further customer
attrition, including retail customers (25% of the bank's customer funding base), whose funds have recently been
showing some signs of stabilizing after significant outflows in the second half of 2003.
resources in 2004: cash and interbank assets accounted for over one third of assets at the end of the first quarter
of 2004. However, this, together with a falling loan book, has negatively affected the bank's net interest earnings
and overall profitability in the first half of 2004.
MSPB's business on both sides of the balance sheet is concentrated and its capitalization, while improving due
to a combination of earnings retentions and a contracting balance sheet, remains low by international standards. These
factors limit MSPB's ability to withstand significant shocks, to which it has become more vulnerable, and are
reflected in both the bank's Long-term rating and Individual rating of 'D/E'.
financial crisis. It is one of the 20 largest banks in Russia by assets, providing mainly corporate and retail
banking services through a network of c.60 branches in Russia. [RU ASIA EUROPE EEU EMRG BNK AAA] me
[Interfax] |
RUSSIA IN FACTS
