Moody's assigns Ba2/B2/NP/E+ ratings to Bank Moscow-Minsk (Belarus)

First-time ratings Moscow, July 15, 2008 -- Moody's Investors Service has today assigned the following global scale ratings to Bank Moscow-Minsk ("BMM"): Ba2 long-term local currency and B2 long-term foreign currency deposit ratings, Not-Prime (NP) short-term foreign and local currency deposit ratings, and an E+ bank financial strength rating (BFSR). The outlook for all ratings is stable. According to Moody's, BMM's E+ BFSR, which translates into a Baseline Credit Assessment of B2, is supported by BMM's solid position in corporate and retail franchise benefiting from its links to the stronger parent -- JSCB Bank of Moscow (BOM) -- and expanding branch network, reasonable diversification of business, and good profitability and asset quality. The BFSR is constrained by operating environment which is subject to administrative measures, challenges to the bank's risk assessment system given its rapid growth, concentrated corporate loan book and funding, inefficient economic capital management reflected in high credit risks in relation to capital, and untested ability to withstand intensifying competition in the longer term. The BMM's Ba2 long-term local currency deposit rating factors in i) its B2 BCA, ii) low systemic support given the bank's notable market shares and ii) Moody's assessment of a very high probability of the parental support from its parent -- BOM (A3/Baa2 (RUR)/P-2/D, stable outlook) -- in the event of a stress situation. Moody's assessment of the support probability is based on the bank's 100% ownership by Bank of Moscow, its strategic fit to the BOM's operations in light of its importance for the BOM and the City of Moscow in supporting their relationship with the Belarusian administration as well as BOM's diversification of business and cross--selling opportunities. As a result, the long-term local currency deposit rating receives a three-notch uplift to Ba2 from the bank's B2 Baseline Credit Assessment. BMM's B2 long-term foreign currency deposit rating is constrained by the relevant country ceiling for Belarus. BMM's BFSR could be upgraded if the bank significantly reduces the credit risks in relation to equity and concentrations on the asset and liability side as a result of further diversification of its franchise maintaining adequate financial fundamentals. The bank's local currency deposit rating is likely to follow the parent's BFSR. Downward rating pressure on BMM's BFSR could result from asset quality or liquidity problems but such occurrence is not envisaged in the short-to-medium term. Headquartered in Minsk, Belarus, BMM reported total consolidated assets of US$310 million and total equity of US$36 million and ranked eighth by assets among Belarusian banks as of 31 December 2007. BMM is active in corporate and retail transactions, with the former supported by its links with BOM. BOM is headquartered in Moscow, Russian Federation. At year-end-2007, BOM reported total consolidated assets of RUB528 billion (US$21.5 billion) and net income of RUB8.9 billion (US$362 million) and was the country's fourth largest bank. It is majority controlled by the City of Moscow (directly and indirectly). The other largest shareholders are the two most senior managers who control 18% in the bank.

• Full name
  Bank Dabrabyt JSC
• Registration country
  Belarus
• Industry
  Banks