Moody's upgrades local currency deposit rating of Belpromstroibank (Belarus) to Ba3

The FINANCIAL -- Moody's Investors Service has on May 14 upgraded the long-term global local currency deposit rating of Belpromstroibank (BPS-Bank) to Ba3 from B1.

The bank's B2 long-term foreign currency deposit rating, Not Prime short-term local and foreign currency deposit ratings were affirmed, while the E+ BFSR remained unchanged. The B2 ratings and the BFSR were not subject to the rating review. All ratings now carry a stable outlook.

This rating action concludes the rating review initiated by Moody's in December 2009 following the acquisition of a 93.27% stake in BPS-Bank by Russia's Sberbank (rated Baa1/Prime-2). The bank's foreign currency deposit rating of B2 was unaffected by the rating review since it is constrained by the foreign currency deposit ceiling for Belarus of B2.

"The upgrade of BPS-Bank's global local currency deposit rating reflects Moody's view of the prospective level of parental support for the bank on the part of its new shareholder. At the same time, the rating agency does not expect the acquisition to have any immediate effect on BPS-Bank's intrinsic financial strength," says Maxim Bogdashkin, Lead Analyst at Moody's for BPS-Bank.

Moody's assessment of the probability of parental support is high, which is driven by Sberbank's majority control over the issuer, high strategic fit, which is evidenced by Sberbank's previously announced capital and funding plans towards BPS-Bank and by the possible reputational risks for the parent.

"Although some of the capital and funding objectives have already materialised in BPS-Bank's business plan for 2010, Sberbank has not yet officially disclosed its overall strategy for BPS-Bank and the Belarussian market," adds Mr. Bogdashkin.

Moody's previous rating action on BPS-Bank's ratings was on 14 December 2009, when the agency placed the B1 long-term local currency deposit rating on review for possible upgrade following an official announcement that Sberbank would acquire a 93.27% stake in BPS-Bank by year-end 2009.


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