Moody’s demotes Bank Severnaya Kazna’s long-term ratings

27 October 2008 (08:09)

Moody’s, the international rating agency, demoted Bank Severnaya Kazna’s long-term ratings on national and foreign currency deposits from B2 to Caa2 – all that without providing any definite rating outlook, reports. What is more, the bank’s financial stability rating went down from E+ to E, with Stable rating outlook.

In the meantime, the agency confirmed Bank Severnaya Kazna’s short-term ratings on national and foreign currency deposits as Not-Prime, whereas Moody’s Interfax Rating Agency decreased the bank’s long-term national scale rating from to

‘These decisions have been brought about by the dramatic negative change in the bank’s liquidity profile because of the recent large-scale outflow of customers’ deposit investments,’ states, actually quoting Olga Ulyanova, one of Moody’s analysts.

The agency’s experts also report the bank’s decision to stop the money deflux by banning the cashing of deposits before the end of the deposit period was a violation of the Russian laws which guarantee every person a right to get their money back from the bank at any given moment.

‘Apart from this, Bank Severnaya Kazna delayed some legal entities’ payment transactions,’ Moody’s says.

‘Even though the bank was able to react timely to the negative changes by borrowing 2.5 billion RUR from Sberbank and some more from the Central Bank of Russia on October 17, 2008, its liquidity problems are still grave enough,’ Olga Ulyanova notes.

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