Fitch downgrades the global rating of 31 Russian banks
Meanwhile, the agency Fitch downgraded the international issuer risk ratings (IDR) in currencies of 31 Russian banks from “B” to “CC”, while it has lowered the short-term one from “B” to “C”.
According to a statement, Fitch took into account in its evaluation the Russian presidential decree of March 5 that imposes “insurmountable obstacles” to the ability of banks to make scheduled debt payments to certain international creditors in their original currency.
“While the practical implementation of this decree remains unclear, we believe the highly elevated risk is best reflected in Fitch’s ‘CC’ rating definition, under which some type of default appears likely,” the note said.
In addition, the agency underlines the risk of increased intervention in foreign currency operations and deposits in the banking sector.
On March 8, the agency already downgraded Russia’s long-term foreign currency sovereign debt rating from “B” to “C”, and considered that the breach of its obligations was “imminent”.
Likewise, Fitch lowered the viability rating (VR) of all Russian banks from “b” to “ccc”, to “reflect the sharp deterioration of the operating environment for conducting banking business”.
“The sanctions imposed by the United States and the European Union have considerably increased economic and financial market risks, meaning we see very high fundamental credit risk to asset quality, solvency, funding and liquidity profiles.” of banks,” concludes Fitch.
On March 6, the rating agency Moody’s also downgraded the sovereign solvency rating of the Russian Government, which was already classified as a “junk bond”, from “B3” to “Ca”, due to the expectation that Capital controls by the Central Bank of Russia restrict cross-border payments, including debt service on government bonds. EFE
With information from Reuters and EFE.
