UPDATE2: Moody’s, S&P: Effect on banks from Kiev’s sanctions small

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MOSCOW, Mar 20 (PRIME) -- A direct influence of the Ukrainian sanctions slapped on the units of Russian state-run banks on the parent banks will be limited, credit rating agencies Moody’s, S&P and Fitch said on Monday.

Associate Vice President of Moody’s Lev Dorf said, as cited in a statement, “A direct influence of the sanctions on Russian parent banks will be limited, since the share of Ukrainian assets and liabilities on their balances is insignificant.”

Earlier in March, Ukrainian President Pyotr Poroshenko introduced sanctions against five Russian banks – Sberbank, VTB Ukraine, BM Bank, a unit of the Bank of Moscow, Prominvestbank, a unit of Vnesheconombank, and VS Bank of Sberbank – for a year, prohibiting them from disinvesting from the country, as well as barring Ukraine’s state-owned companies from depositing funds with the banks.

Sergei Voronenko, director of the financial institutes department of S&P, agreed in an interview with PRIME, “From the point of view of influence of these events on the Russian banks, they will barely be able to make any significant effect on the financial stability given the small amount of assets as compared with the volume of the groups. The situation in terms of possible losses looks like quite manageable.”

Fitch Senior Director Alexander Danilov told PRIME that Ukraine’s sanctions may weaken their parent banks’ positions in talks to sell them off.

“(The situation) may arouse clients’ concern and provoke capital outflow, which the parent banks will have to replenish. But it will be impossible to return the funds soon due to the restrictions,” the expert said.

“It may also weaken the parent banks’ position in negotiations to sell their Ukraine-based affiliates.”

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