(Source: Info-Prod Research (Middle East))
Moody's Interfax Rating Agency has todaydowngraded the national
scale rating (NSR) of Interregional InvestmentBank to C.ru from
Baa1.ru. Moscow-based Moody's Interfax is majorityowned by Moody's,
a leading global rating agency. Moody's downgrade of the NSR rating
for Interregional Investment Bank isa result of the withdrawal of
its banking license by the Central Bank ofRussia (CBR) on 18
November 2009. According to the press releasepublished by the CBR,
the license withdrawal was due to violation ofbanking laws, failure
to conduct client transactions, failure to createadequate loan loss
and general provisions, as well as substantialmanipulation with the
regulatory reporting to the CBR. The InterregionalInvestment Bank is
currently under temporary administration. According toour estimates
and historical experience in Russia, the recovery value forthe
bank's creditors is likely to be very low. As a result of the
withdrawal of its banking license, the bank is no longer a deposit
taking institution and can no longer attract retail deposits. Before
the bank lost its license, we had identified the following credit
challenges for Interregional Investment Bank: (1) very high
informationrisk, (2) weak liquidity position, (3) significant
industry andsingle-name concentrations on both sides of the balance
sheet, (4)significant exposure to related parties, and (4)
sensitivity of thebusiness model to political developments, with
core clients and marketsbeing state-controlled and heavily state-
regulated. We note that, as of the date of this rating action, the
bank had no senior unsecured, subordinate or structured finance
obligations rated by Moody's Interfax. Until today, the Baa1.ru NSR
rating on the bank has remained unchanged since it was first
assigned in July 2005. Domiciled in Moscow, Russia, Interregional
Investment Bank reported -- asof 1 October 2009 (under Russian GAAP)
-- total assets of RUB 6.6 billionand total shareholders' equity of
RUB 1.6 billion. Those figures could besubstantially misstated and
differ from the real numbers, as indicated bythe CBR.
Originally published by Info-Prod Strategic Business Information.
(c) 2009 Info-Prod Research (Middle East). Provided by ProQuest LLC. All rights Reserved.
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