London, 13 August 2015 -- Moody's Investors Service has today downgraded to C from B3 the long-term local and foreign-currency deposit ratings of ProbusinessBank (Russia). At the same time, Moody's downgraded the bank's baseline credit assessment (BCA)/Adjusted BCA to c from b3 and affirmed the bank's Not Prime short-term local and foreign-currency deposit ratings.
Moody's also downgraded ProbusinessBank's long-term program ratings: its senior unsecured local and foreign-currency program ratings were downgraded to (P)C from (P)B3, and its subordinated local and foreign-currency program ratings were downgraded to (P)C from (P)Caa1. Moody's affirmed ProbusinessBank's short-term local and foreign-currency program ratings of (P)Not Prime.
Finally, Moody's downgraded ProbusinessBank's long-term Counterparty Risk Assessment (CR Assessment) to C(cr) from B2(cr) and affirmed the bank's short-term Not Prime(cr) CR Assessment.
Moody's will withdraw all ProbusinessBank's ratings following the withdrawal of its banking licence by the Central Bank of Russia on 12 August 2015. Please refer to the Moody's Investors Service's Policy for Withdrawal of Credit Ratings, available on its website: www.moodys.com.
The rating action and Moody's subsequent ratings withdrawal follow the Central Bank of Russia's announcement on 12 August 2015 that it had revoked ProbusinessBank's banking licence, as a result of the entity's violation of state laws on banking activity and its failure to reach the minimum capital adequacy regulatory requirements.
The downgrade of ProbusinessBank's ratings reflects Moody's expectations of heavy losses that the bank's creditors are likely to incur as a result of liquidation, given (1) the bank's poor asset quality; (2) very weak capital position; and (3) historical data for similar cases in Russia, when banks' licences have been revoked.
According to Moody's, ProbusinessBank had no rated debt outstanding at the time of the rating withdrawal, and customer deposits represented the main source of the bank's non-equity funding.