International rating agency Moody's Investors Service has raised its ratings on Samara-based Pervobank, namely its long-term local currency and foreign currency deposit ratings from B3 to B2, its long-term counterparty risk assessment (which determines the probability of fulfillment by a financial institution of its contractual obligations in case of default) from B2(cr) to B1(cr), and also its adjusted baseline credit assessment from b3 to b2. The outlook for the bank's long-term global scale deposit ratings was revised from negative to positive.
At the same time, the agency affirmed the lender's baseline credit assessment at b3, short-term local currency and foreign currency deposit ratings at Not Prime, and also its short-term counterparty risk assessment at Not Prime (cr).
The bank's national scale rating was also upgraded, Moody's said on its website.
As the agency noted in a press release, the rating action came owing to Pervobank's continuing integration with more financially strong Promsvyazbank, which was added by the Bank of Russia to the list of systemically important banks. The banks have general owners, and the banks are expected to merge in 2016, the agency noted.
The upgrade of Pervobank's deposit ratings reflects the viewpoint of Moody's about the moderate probability for the bank to get support from Promsvyazbank, if need be.
In turn, the affirmation of Pervobank's baseline credit assessment was stipulated by its moderate related indicators, while the bank's capitalization numbers are still limited by a high portion of non-core assets and weak financial results. Meanwhile, the lender's assessment is backed by balanced numbers of liquidity and funding, and also its strong business positions in the Samara region and business ties with such corporate clients as Novatek and other companies that are controlled by the bank's former shareholder Leonid Mikhelson, the agency noted in a press release.