The credit rating service demoted Russian Alfa-Bank’s counteragent’s long-term credit rating from BB- to B+, while at the same time affirming its short-term rating at B, with Stable Rating Outlook.

‘Nevertheless, Alfa-Bank’s national scale rating had to be downgraded from ruAA- to ruA+. However, we did take all of the bank’s ratings off our CreditWatch list after they hit it on June 17, 2009 with Negative Rating Outlooks. As for our assessment of Alfa-Bank’s financial stability, this criterion’s rating went down from ВВВ- to BB+.

All in all, these downgrades mainly stem from the troubles with the bank’s increasingly weakening assets and the ongoing Russian banking sector gloom,’ says Standard & Poor’s analyst Ekaterina Trofimova.

‘The economic recession has remained the fundamental factor affecting this bank’s financial development indicators, especially its funding dynamics. In fact, Alfa-Bank’s market capitalization only makes up partially for the damage done to it by the economic problems. Incidentally, we expect an 8% decline in the country’s economic activity this year,’ the agency reports.