Moody's on June 8 upgraded Otkritie Financial Corp. Bank's senior unsecured debt and long-term bank deposit ratings to B1 from B2, with a positive outlook, concluding a review initiated in February.
The rating agency also upgraded the Russian lender's baseline and adjusted baseline credit assessments to "caa1" from "caa3" and its long-term counterparty risk assessment to Ba3(cr) from B1(cr), and affirmed its NP short-term bank deposit rating and its NP(cr) short-term counterparty risk assessment.
Moody's said the ratings actions were driven by a significant reduction of the bank's problem loans after its debt to former unit National Bank Trust PJSC was fully repaid in the first quarter, as well as an improvement in Otkritie's capital position following the deconsolidation of NBT.
The positive outlook on Otkritie's long-term debt and deposit ratings reflects the agency's expectations that the coming transfer of problem assets to NBT from Otkritie and B&N Bank, in addition to the simultaneous recovery of Otkritie's operations, will significantly improve the latter's asset quality and profitability while maintaining its capital position at an adequate level, the agency added.
Moody's noted, however, that the impending merger between B&N and Otkritie will make performance improvements for the latter complex and difficult.
