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. Last Updated: 07/27/2016

BankWatch Upgrades Russia’s Rating

Thomson Financial BankWatch has raised its ratings for Russia and state savings bank Sberbank to B- from CCC, the agency said in a Tuesday statement.

It also raised senior debt ratings to B- from CCC for Vneshekonombank and International Moscow Bank.

“The outlook for Russia’s B- Sovereign Risk rating is positive and the rating is likely to be upgraded again once an agreement is reached to restructure Soviet-era debt of $40 billion with the Paris Club of creditors,” it said. BankWatch cited Russia’s rescheduling of Soviet-era London Club debt as a milestone and also pointed to improved fiscal and balance of payments positions, political stability and President Vladimir Putin’s ability to secure some reforms as backing the upgrade.

It said Sberbank, with 80 percent of retail deposits and an explicit state deposit guarantee, had increased its dominance of the market since the 1998 crisis and Vneshekonombank’s liability position was clearer after the restructuring of London Club debt, nominally owed by Vnesh, into sovereign Eurobonds.

International Moscow Bank, majority owned by strong Western banks, had been recapitalized by its shareholders after the 1998 banking crisis, BankWatch said.