S&P downgrades several Russia banks, places the ratings of another 19 on CreditWatch negative

S&P Global Ratings on Monday downgraded several Russian banks and placed the ratings of another 19 on CreditWatch negative, to reflect the heightened geopolitical risks facing them after Russia’s invasion of Ukraine led to a wave of international sanctions. The agency downgraded long and short-term ratings of Raiffeisenbank AO, UniCredit Bank AO, and Gazprombank JSC, as well as Alfa-Bank JSC and its holding company ABH Financial Ltd. “We also placed our ratings on Russian financial institutions, their debt issues, subsidiaries, and related entities on CreditWatch with negative implications, since we believe these entities face increased geopolitical and economic risks.” S&P said in a statement. “The CreditWatch placement on our rating on subsidiaries reflects the likelihood that a potential decline in the parent companies’ creditworthiness would have a negative knock-on effect on those entities.” The move comes after S&P downgraded Russia’s sovereign rating on Friday to BB+/B from ‘BBB-minus/A-3, placing it in high-yield, or “junk” status. “In our view, the escalation of Russia-Ukraine tensions, Russian operations in
Ukraine, and widening of sanctions against Russia could lead to conditions
that eventually destabilize Russia’s economy and financial system,” S&P said.

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