Moody's on Oct. 8 extended the review for downgrade on U.K.-based VTB Capital PLC's Ba3 long-term local- and foreign-currency bank deposit ratings and Ba1(cr) long-term counterparty risk assessment.

The agency also placed the bank's "b2" baseline and "b1" adjusted baseline credit assessments on review for downgrade. Its short-term local- and foreign-currency bank deposit ratings of Not Prime and short-term counterparty risk assessment of Not Prime(cr) were affirmed.

The ratings actions are driven by the ongoing material changes in the lender's balance sheet and business model following the restructuring of parent VTB Bank (PJSC)'s European businesses, which is in response to the U.K.'s planned exit from the European Union and heightened geopolitical risks.

Moody's said the move will result in a substantial reduction in VTB Capital's balance sheet and a decrease in profit and net interest income. However, the agency still considers the bank to be an integral part of the VTB group.