S&P revises outlook on Bank Rossiya to 'negative' on sanctions

A general view of the head office of Bank Rossiya in St. Petersburg
A general view of the head office of Bank Rossiya in St. Petersburg March 21, 2014. REUTERS/Alexander Demianchuk

MOSCOW (Reuters) - U.S. sanctions imposed on Bank Rossiya, described by the U.S. Treasury as "the personal bank for senior officials" in Russia, prompted ratings agency Standard & Poor's to downgrade its outlook for the lender on Wednesday to "negative".

The agency, which previously had a "stable" view of the bank's outlook, said Bank Rossiya's "business and financial profiles could deteriorate" following the sanctions.

Standard & Poor's also said it was suspending its rating as the U.S. measures "preclude us from maintaining a rating on the bank".

Not being followed by credit ratings agencies can hinder a company's ability to raise capital on international markets.

Bank Rossiya was placed under sanctions on Thursday last week, along with its chairman and largest shareholder Yuri Kovalchuk, over Russia's annexation of Crimea from Ukraine, which Western leaders say is illegal.

Kovalchuk is one of more than 20 Russians barred from entering the United States or holding assets there as a result of the measures.

S&P said the bank would likely be supported by Russia's central bank and it believes "that the core deposit clientele, mostly large Russian corporations, will remain in place".

Russian President Vladimir Putin said last week that he would open an account at Bank Rossiya.

(Reporting by Megan Davies; Editing by Maria Kiselyova and Anthony Barker)