Moody's on July 8 upgraded 'slong-term foreign- and local-currency deposit ratings to B2 from B3 and changedthe outlook on the ratings to stable from positive.

The agency attributed the upgrade to material improvementsin the bank's loss-absorption capacity, following completion of itsrecapitalization plan.

However, the agency continues to view the bank asundercapitalized and this view is reflected in the bank's baseline creditassessment, which, along with the adjusted baseline credit assessment, wasraised to "caa2" from "caa3."

The baseline credit assessment also reflects the agency'sexpectation that the bank will benefit from regulatory tolerance over the next12 to 18 months and will continue to have a high level of dependency on theUzbek government's extraordinary support in terms of capital.

Simultaneously, Moody's upgraded the bank's long-termcounterparty risk assessment to B1(cr) from B2(cr) and affirmed the Not-Primeshort-term local- and foreign-currency deposit ratings and Not-Prime(cr)short-term counterparty risk assessment rating.