Moody’s Investors Service has lowered long- and short-term currency deposit ratings of three Russian subsidiaries of France’s Societe Generale (SocGen) by one notch following the recent downgrade of the parent bank’s ratings.
SocGen holds an 82.4% stake in Rosbank, which, in turn, owns (100%) two other Russian subsidiaries – mortgage lender DeltaCredit and consumer lender Rusfinance.
“The rating actions on the Russian entities is triggered by the reduction in the financial capacity of SocGen as a support provider, as indicated by SocGen’s recent rating downgrade,” Moody’s said in a statement late on Monday.
The agency also said the rating action reflected concerns that group level pressures may affect financial strength at the subsidiary level, and the impact of weakening domestic operating environments.
Meanwhile, standalone Bank Financial Strength Rating, which was not subject to the review, remained unchanged at D/ba2, with stable outlook, for all three Russian entities.
On June 21, Moody’s downgraded SocGen’s long-term debt and deposit ratings by one notch, to A2 from A1, and lowered SocGen’s standalone financial strength by one notch to C-/baa2 from C-/baa1.
Rosbank ranks among the 10 largest banks in Russia and holds sizeable shares in certain market segments, such as mortgage lending and consumer finance. It operates a network of 700 offices in 340 Russian cities.