Moody’s downgrades CB Renaissance

Moody's Investors Service said it downgraded to B3 from B2 the long-term foreign- and local-currency deposit ratings, and foreign- and local-currency senior debt ratings of Commercial Bank Renaissance Credit LLC.

The downgrade was driven by (a) the bank's rapidly deteriorating asset quality following the weak performance of the consumer lending market in Russia; and (b) the net losses posted by the bank in H1 2014 that reflected its high provisioning charges against problem loans, and Moody's expectations of further losses at least until year-end 2014.

Concurrently, the agency downgraded CB Renaissance’s local-currency subordinated debt rating to Caa1 from B3. The bank's standalone bank financial strength rating of E+, which now corresponds to a baseline credit assessment of b3 (formerly b2), now carries negative outlook. The bank financial strength rating was affirmed.

The outlook on all the bank's long-term debt and deposit ratings is also negative.

Moody's said its assessment of CB Renaissance’s ratings is largely based on the issuer's audited financial statements for 2013, its unaudited financial statements for the first half of 2014, prepared under IFRS, as well as information received from the bank.

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