Moody's Reviews Belpromstroibank's B1 Rating for Upgrade

Moody's Investors Service today placed the B1long-term local currency deposit rating of Belpromstroibank (BPS-Bank) onreview for possible upgrade. The bank's B2 long-term foreign currencydeposit rating, Not Prime short-term local and foreign currency depositratings and E+ bank financial strength rating (BFSR) were affirmed withstable outlook. This rating action follows official announcements that Russian bankSberbank will acquire a 93.27% stake in BPS-Bank for US$280.8 million.The transaction is expected to close by the end of 2009. Moody's review for possible upgrade of BPS- Bank's local currency depositrating reflects its view of the prospective level of parental support forthe bank from Sberbank. The probability of such support will be driven bySberbank's strategic commitment to BPS-Bank and to the Belarusian market.Moreover, according to the press release issued by the banks on 11December 2009, Sberbank will additionally inject up to US$300-350 millionin BPS-Bank's capital in 2010-2014 and assist in attracting for up toUS$2 billion in funding to the bank during this period. "The review of the bank's rating will be concluded once the legal acquisition of BPS-Bank's shares by Sberbank is completed," adds Maxim Bogdashkin, a Moscow-based Moody's Analyst and the lead analyst for BPS-Bank. The bank's foreign currency deposit rating of B2 is unaffected by this rating action since it is constrained by the foreign currency depositceiling for Belarus of B2. With regard to the bank's BFSR, Moody's explained that it does not expect the acquisition to have any immediate effect on BPS-Bank's intrinsicfinancial strength. The rating agency therefore affirmed BPS-Bank's BFSRat E+ with stable outlook. At the same time, the rating agency expects the acquisition to be rating-neutral for Sberbank, due to the relatively small size ofBPS-Bank. Moody's previous rating action on BPS-Bank's ratings was on 14 July 2009, when it downgraded its global local currency deposit rating to B1 fromBa1 as Belarus' ability to provide support to its banking system wasreassessed. Headquartered in Minsk, Belarus, BPS-Bank reported unaudited totalconsolidated assets and net profit in accordance with IFRS of US$1.69billion and US$28.0 million respectively as of Q3 2009.

Originally published by Info-Prod Strategic Business Information.


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