Standard & Poor's, the international rating agency, had to demote the Russian Gazprombank’s counterparty’s long-term and short-term credit ratings from BBB-/A-3 to ВВ+/В; the Rating Outlook dropped to Negative. At the same time, Gazprombank’s national scale rating was affirmed at ruAA+.

‘This rating demotion has to do with the bank’s weakened solvency through lower capitalization and a dramatic decrease in profits after a recent massive loss on trading transactions. What is more, the Russian economy on the whole has slowed down recently. Then, the risk level was enhanced by the bank’s participation in the state projects on supporting the national banking and business systems,’ says the agency’s analyst Ekaterina Trofimova.

The agency reports that the bank’s strengths lie in the ongoing support of the parent enterprise as well as increased state support; besides, Gazprombank still enjoys a great business reputation, low liquidity risks (low in comparison with the country’s average levels), and big enough short-term back payments on foreign loans.

‘As for the Negative Rating Outlook, this outlook actually coincides with those given to Gazprom itself and the Russian Federation. Moreover, it reflects the negative impact the current troubles in the banking sector and the worsened ambient conditions make on the bank’s performance. All these have led to greater market risks, lower capitalization, fewer profits, and less good-looking assets,’ Trofimova added.