Moody's on June 13 upgraded the long-term local-currency bank deposit and senior unsecured debt ratings of Russia-based AO Raiffeisenbank to Baa3 from Ba1, with a stable outlook, following the June 4 upgrade of Austrian parent Raiffeisen Bank International AG.
The rating agency also upgraded the bank's adjusted baseline credit assessment to "baa3" from "ba1," the long-term counterparty risk assessment to Baa2(cr) from Baa3(cr), and the short-term local-currency bank deposit rating to Prime-3 from Not Prime. It affirmed Raiffeisenbank's Ba2 long-term foreign-currency bank deposit rating, with a stable outlook, along with the Not Prime short-term foreign-currency bank deposit rating, "ba1" baseline credit assessment and P-3(cr) short-term counterparty risk assessment.
The agency pointed to the Russian lender's resilient business model, and said it expects the bank to report strong profitability in the next 12 to 18 months. Moody's also noted that the lender's problem loan portfolio is significantly below the problem lending level estimated by the agency for the Russian banking sector, while the problem loan coverage by provisions remains strong.