Moody’s downgrades seven major Russian banks

Moody’s Investors Service has downgraded the ratings of seven major financial institutions in Russia, in particular, Sberbank, VTB, Gazprombank, Russian Agricultural Bank, Agency for Housing Mortgage Lending, Vnesheconombank and Alfa-Bank, RIA Novosti has reported.
The outlook on the long-term ratings of these institutions is negative.
Earlier on October 18, Moody’s lowered Russia’s debt rating from Baa1 to Baa2. The reasons for the downgrade were the ongoing crisis in Ukraine, which in turn affects the Russian economy in the form of sanctions that include restrictions on the largest Russian banks and a number of key enterprises in the defense and energy sectors.
In addition, Moody’s experts predict a “gradual, but ongoing erosion of the country’s foreign-exchange buffers” due to capital flight, as well as Russian borrowers’ restricted international market access and low oil prices.

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