S&P says uncertainty putting moderate pressure on Russian bank ratings

LONDON, March 28 Fri Mar 28, 2014 8:15am EDT

LONDON, March 28 (Reuters) - Russia's banks are likely to see "modest" pressure on their credit ratings, Standard and Poor's said on Friday, if the country's economy slows in the wake of Ukraine crisis sanctions imposed by the United States and Europe.

"Our base-case scenario covers a modest further slowdown in the Russian economy, with some stabilisation of the rouble at the current lower levels," S&P said in a new report.

"Asset quality, profitability, and potentially liquidity are set to deteriorate with generally moderate pressure on our ratings on Russian banks. However, for small banks, we expect a more pronounced impact on their financial profiles."

S&P added that the pressure would be greater if the tensions over Ukraine became more intense and that, in that scenario, even "certain larger banks with already-thin capital positions", were likely to be affected. (Reporting by Marc Jones; Editing by Alison Williams)

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