November 14, 2008 |
Moscow, November 14, 2008 -- Moody's Investors Service today assigned Baa2
long-term and Prime-2 (P-2) short-term foreign and local currency deposit
ratings and a D- bank financial strength rating (BFSR) to Bank Societe
Generale Vostok (BSGV). The outlook for all the ratings is stable.
At the same time, Moody's Interfax Rating Agency has assigned a Aaa.ru
long-term national scale rating (NSR) to BSGV. Moscow-based Moody's
Interfax is majority owned by Moody's, a leading global rating agency.
The Baa2/P-2/D- global scale ratings assigned to BSGV reflect its global
default and loss expectation, while the Aaa.ru national scale rating
reflects the bank's credit quality relative to that of its domestic peers.
According to Moody's, the bank's local and foreign currency deposit
ratings receive a four-notch uplift from the baseline credit assessment
of Ba3, which is primarily driven by the very high probability of
support in case of need from BSGV's controlling shareholder, Societe
Generale, which is rated Aa2/P-1/B-.
"The key factors constraining BSGV's D- BFSR are the rapid growth of the
bank's loan portfolio together with a low level of provisioning of 0.4%
relative to total NPLs, its historically weak, albeit recently improving,
financial performance, its low capital adequacy level with Tier 1 ratio
at 9.76%, its significant reliance on wholesale debt for funding and a
high reliance on large corporate clients for revenue," says Semyon
Isakov, Analyst in Moody's Financial Institutions Group.
"The rating, however, also reflects BSGV's good asset quality with a
reported level of NPLs of 0.8%, the loan book's adequate diversification
by industry, the strengthening banking franchise and good risk management
practices derived from those of its parent. The rating also benefits from
wide-ranging assistance provided to BSGV by Societe Generale," adds Mr.
BSGV is headquartered in Moscow, Russia, and, at 31 December 2007,
reported total consolidated IFRS assets of US$4.3 billion and a net loss
of US$13 million for the year.
|Full company name||Joint-Stock company "Banque Societe Generale Vostok"|
|Country of risk||Russia|