Moody’s lowers MTS Bank

Moody's Investors Service said it downgraded MTS Bank, OJSC's long-term local- and foreign-currency deposit ratings to B2 from B1 and foreign-currency subordinate debt rating to B3 from B2 with negative outlook.

Concurrently, the agency affirmed the bank's Not Prime short-term local- and foreign-currency deposit ratings. MTS Bank's standalone bank financial strength rating of E+, equivalent to a baseline credit assessment of b3, is not affected and carries stable outlook.

Moody's assessment of MTS Bank's ratings is largely based on its unaudited financial statements for the first six months of 2014 – prepared under IFRS – as well as information received from the bank.

Moody’s said the one-notch downgrade follows the recent rating action on the bank's parent Sistema JSFC and reflects the reduced capacity of the parent to provide capital and funding support to its subsidiary, as indicated in the downgrade of Sistema's corporate family rating to B1 from Ba2 with negative outlook.

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