15 June 2004 16:03
S&P RAISES LONG-TERM RTG ON TRANSCREDITBANK TO `B-`
PARIS. June 15 (Interfax) - Standard & Poor's Ratings Services has raised its long-term counterparty credit
rating on Russia-based TransCreditBank (TCB) to 'B-' from 'CCC+', S&P said in a press release
Tuesday.
At the same time, the 'C' short-term counterparty credit rating on the bank was affirmed. The outlook is
stable.
The ratings on the bank also reflect the positive reform underway
in the Russian railway system. In October 2003, the commercial
no impact on the business and financial profile of TCB, which has
continued to operate as the main settlement bank for the Russian
"The rating action reflects the privileged position that TCB continues to have in serving the Russian railway
sector," said Standard & Poor's credit analyst Ekaterina Trofimova.
operations of the Railway Ministry were transferred to a newly created railway company, JSC "Russian
Railways" (RZhD). This reorganization had
railways. More than 70% of RZhD's cash balances are held in TCB.
However, the ratings are nevertheless constrained by uncertainties surrounding the outcome of TCB's planned
privatization and by the bank's weak capitalization and profitability. The ratings also reflect the continued high
operating and credit risks inherent in the Russian banking environment.
With assets of 33 billion rubles (about $1.1 billion) at March 31, 2004, TCB is a midsize institution ranking among
the largest 30 banks in Russia. Although its close links with the railways bring TCB commercial and financial benefits,
Standard & Poor's does not assume that RZhD would necessarily provide timely support to TCB in case of
need.
The future direction of the ratings will largely depend on the results of the privatization of TCB, its future
capital position, and its ability to generate sufficient revenues from its expanded banking network.
"If the ongoing railway sector reform is favorable for TCB, if the operating environment continues to improve
for banks in Russia, and if TCB's strategies and operating investments are implemented prudently and successfully,
the ratings on the bank could be raised," added Trofimova.
[Interfax] |
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