The international rating agency placed Probusinessbank’s (Life Group’s asset) long-term B- Issuer Default Rating and other ratings on its Rating Watch, with Negative rating outlook.

‘The fact that we gave their ratings Negative outlook stems from the increasingly weakening quality of Probusinessbank and its daughter banks’ assets and their limited ability to make up for the future losses with the help of their capitals. The bad debts (that is, the ones overdue by ninety days or more) are reported to make up 8.6% of Probusinessbank’s portfolio in May 2009. The regulatory capital sufficiency index reached 11% at the end of the first half of 2009 (while the required minimum comes to 10%), while VUZ-Bank and Bank Express-Volga (Probusinessbank’s two largest daughter enterprises) had the indices of 11% to 12%. The bank reports they had enough reserves to compensate for their toxic assets by 115% at the end of May 2009. However, the figure looked more like 100% in the consolidated report. Then, Bank24.ru, Probusinessbank’s third largest daughter enterprise, only had 2% capitalization in May 2009, so it was lucky that the Central Bank actually permitted them not to observe the minimum capital sufficiency requirements,’ Fitch Ratings’ analysts explain.