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Moody's Interfax affirms Aa1.ru of Transcreditbank (Russia)

August 31, 2011 | Cbonds

Moscow, August 31, 2011 -- Moody's Interfax Rating Agency has today affirmed the Aa1.ru long-term national-scale credit ratings (NSR) of TransCreditBank (TCB). NSRs carry no specific outlook.

Please see ratings tab on the issuer/entity page on moodys.com for information on Global Scale Rating.

Moody's Interfax's assessment is primarily based on the official press releases of the Bank VTB and TCB, on the bank's audited financial statements for 2010 prepared under IFRS and the information we received from the top management of VTB.

RATINGS RATIONALE

According to Moody's Interfax the ratings affirmation follows Bank VTB's (VTB -- rated Baa1/Prime-2/D-, negative outlook) announcement that it had recently acquired an additional 29% stake in TCB, thus increasing its shareholding to 74% in July 2011 from 44% at year-end 2010. TCB's Aa1.ru NSR continues to map to the Ba1 long-term local currency rating assigned by Moody's Investors Service which now benefits from high probability of support from VTB (see Moody's Issuer Comment, "Moody's comments on Bank VTB's planned acquisition of Russia's TransCreditBank", published on 12 October 2010 and available on www.moodys.com).

The high probability of support from VTB is based on the (i) controlling ownership by VTB; (ii) increasing operational integration (for example TCB's risk function is now controlled by VTB, its board of directors is controlled by VTB's representatives, and VTB's representatives are included in the management board); and (iii) significant strategic fit as the current core clients of TCB -- companies related to Russian Railways
-- are an important client segment for VTB.

Although the Russian Railways (the former controlling shareholder) continues to control a 25% + 1 share in TCB, Moody's believes that its willingness to provide support to TCB has substantially diminished after it sold its majority stake in the bank. As a result, Moody's does not incorporate any support from the Russian Railways into the ratings of TCB.

Company: TransCreditBank

Full company nameTransCreditBank OJSC
Country of riskRussia
Country of registrationRussia
IndustryBanks

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