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S&P: Troika Dialog Outlook Revised To Stable On Capital Increase; National Scale Rating Raised To 'ruA+' And Off Watch Pos

October 01, 2009 | Standard & Poor's

MOSCOW (Standard & Poor's) Oct. 1, 2009--Standard & Poor's Ratings Services said today it raised its Russia national scale rating on Troika Dialog Group Ltd., the holding company of Russian investment group Troika Dialog (Troika), to 'ruA+' from 'ruA'. The rating was removed from CreditWatch, where it was placed with positive implications on March 10, 2009.

At the same time, we revised the outlook on the long-term global scale rating to stable from negative. The 'B+/B' long- and short-term counterparty credit ratings were affirmed.

The upgrade of the national scale rating and the outlook revision follow the acquisition by Standard Bank of South Africa Ltd. (SBSA; BBBpi) of a 33% stake in Troika. This transaction has increased Troika's equity by $300 million. "This broadly improves Troika's creditworthiness, in our opinion, due to the enhanced commercial and financial flexibility resulting from the strategic partnership and ownership by SBSA," said Standard & Poor's credit analyst Elena Romanova.

With total reported assets of $3.8 billion and equity of more than $500 million on March 31, 2009, Troika is one of Russia's leading brokerage, asset management, and investment banking groups. The new share issuance raises total capital to more than $800 million and adds to the liquidity cushion that Troika has built up this year in the face of the difficult market conditions in Russia.

The Russian stock market has been highly volatile over the past year, putting pressure on the group's commercial and financial performance. Troika's trading volumes have declined considerably so far in 2009 compared with the same period of 2008. Cost-saving measures imposed by Troika have only partially made up for reduced business volumes, although volumes have now improved from their depressed levels of the last months of 2008. We believe that the group’s profitability will remain weak in the near term.

Troika received full ownership of SBSA's small Russian subsidiary bank ZAO Standard Bank as a minority portion of the payment for the 33% stake (the majority was paid in cash). This acquisition will not materially affect Troika's financial profile.

"The stable outlook balances the negative market pressures in Russia with Troika’s enhanced capitalization and the business benefits of Troika's cooperation with SBSA," said Ms. Romanova.

Company: Troika-D Bank

Full company nameJoint Stock Company TROIKA-D BANK
Country of riskRussia
Country of registrationRussia


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