London, 10 June 2021 -- Moody's Investors Service ("Moody's") has today
affirmed Vozrozhdenie Bank's Baseline Credit Assessment (BCA) of
b2, its Adjusted BCA of b1, its long-term bank deposit
ratings of Ba1, its Counterparty Risk Ratings (CRRs) of Ba1 and
its Counterparty Risk Assessment (CR Assessment) of Ba1(cr). Concurrently,
the rating agency affirmed the bank's short-term bank deposit
ratings of Not Prime, its short-term CRRs of Not Prime and
its short-term CR Assessment of Not Prime(cr). The outlook
on the bank's long-term deposit ratings and the issuer outlook
remained stable.
Following the affirmation, Moody's will withdraw all of the
above ratings after Vozrozhdenie Bank merges with BM-Bank JSC (BM-Bank)
and ceases to exist as a separate legal entity. The merger is due
to take place on 15 June 2021. At the time of the withdrawal,
the bank's long-term deposit ratings carried a stable outlook.
Please refer to the Moody's Investors Service's Policy for Withdrawal
of Credit Ratings, available on its website, www.moodys.com.
A full list of affected ratings can be found at the end of this press
release.
RATINGS RATIONALE
Bank VTB, PJSC (Bank VTB) has announced plans regarding the integration
of its banking subsidiaries in Russia, which include a merger of
Vozrozhdenie Bank with Bank VTB's other subsidiary, BM-Bank,
on 15 June 2021. BM-Bank, previously known as Bank
of Moscow, is in financial rehabilitation since 2011.
Moody's affirmation of Vozrozhdenie Bank's ratings reflects the
rating agency's assessment that the bank's credit profile
will remain closely linked to that of its parent, both before and
after the planned merger. Vozrozhdenie Bank's ratings are
further underpinned by the prospect of the merged BM-Bank ultimately
merging with Bank VTB, whose long-term deposit ratings are
one notch higher; however, Moody's doesn't expect
such a merger to occur within the next 12-18 months.
Vozrozhdenie Bank's b2 BCA is constrained by its high level of problem
loans and negative net income, as a result of the transfer of customers
and business to the parent bank. At the same time, the bank
benefits from its improved capital adequacy, following a contraction
in its loan book, plans regarding the merger with the highly capitalized
and liquid BM-Bank, and access to funding and capital support
from Bank VTB, in case of need.
VERY HIGH AFFILIATE SUPPORT
Vozrozhdenie Bank's Adjusted BCA of b1 benefits from one notch of uplift
above its b2 BCA, given our assessment of a very high probability
of affiliate support from the bank's parent, Bank VTB. This
assessment reflects the parent's 100% ownership of and control
over the bank, as well as Bank VTB's plans regarding the integration
of its banking subsidiaries in Russia.
VERY HIGH GOVERNMENT SUPPORT
The additional three notches of uplift in Vozrozhdenie Bank's Ba1 deposit
ratings above its b1 Adjusted BCA result from our view of a very high
probability of support from the Russian government. This assessment
reflects our expectation that Vozrozhdenie Bank's status as a member of
the state-owned VTB Group will make it eligible for state support
in case of need.
LIST OF AFFECTED RATINGS
..Issuer: Vozrozhdenie Bank
Affirmations:
....Adjusted Baseline Credit Assessment,
Affirmed b1
....Baseline Credit Assessment, Affirmed
b2
....Short-term Counterparty Risk Assessment,
Affirmed NP(cr)
....Long-term Counterparty Risk Assessment,
Affirmed Ba1(cr)
....Short-term Counterparty Risk Ratings,
Affirmed NP
....Long-term Counterparty Risk Ratings,
Affirmed Ba1
....Short-term Bank Deposit Ratings,
Affirmed NP
....Long-term Bank Deposit Ratings,
Affirmed Ba1, Outlook Remains Stable
Outlook Action:
....Outlook, Remains Stable
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Banks Methodology
published in March 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1261354.
Alternatively, please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and
sensitivity analysis, see the sections Methodology Assumptions and
Sensitivity to Assumptions in the disclosure form. Moody's
Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement
provides certain regulatory disclosures in relation to the provisional
rating assigned, and in relation to a definitive rating that may
be assigned subsequent to the final issuance of the debt, in each
case where the transaction structure and terms have not changed prior
to the assignment of the definitive rating in a manner that would have
affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
The ratings have been disclosed to the rated entity or its designated
agent(s) and issued with no amendment resulting from that disclosure.
These ratings are unsolicited.
a.With Rated Entity or Related Third Party Participation:
YES
b.With Access to Internal Documents: NO
c.With Access to Management: YES
For additional information, please refer to Moody's Policy
for Designating and Assigning Unsolicited Credit Ratings available on
its website www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's general principles for assessing environmental, social
and governance (ESG) risks in our credit analysis can be found at http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1263068.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the EU and is endorsed
by Moody's Deutschland GmbH, An der Welle 5, Frankfurt
am Main 60322, Germany, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that issued the credit rating is available on www.moodys.com.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Svetlana Pavlova, CFA
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service Limited, Russian Branch
7th floor, Four Winds Plaza
21 1st Tverskaya-Yamskaya St.
Moscow 125047
Russia
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
Yaroslav Sovgyra, CFA
Associate Managing Director
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
