Russian Agricultural Bank -- Moody's: Russian Agricultural Bank's Baa3 deposit rating constrained by asset quality challenges, but underpinned by state support

London, 05 August 2014 -- Russian Agricultural Bank (RusAg, deposits Baa3 negative, BFSR E+ negative/BCA b3) has reported persistently weak asset quality, reflecting weak credit underwriting standards observed in the past, combined with the bank's government policy mandate in the agribusiness sector. The bank, known locally as Rosselkhozbank, is the fifth-largest in Russia in terms of consolidated assets. In addition to weak asset quality, RusAg also exhibits weak capital levels. However, the aforementioned constraints are mitigated by strong state support, reflecting the government's 100% ownership and RusAg's role as the main agribusiness lender in Russia. The importance of this support will increase against the background of US and EU sanctions imposed in response to the crisis in Ukraine, says Moody's Investors Service in a new report published today.

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