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Ratings On Several Financial Institutions With Links To Russia Kept On CreditWatch Negative And Then Withdrawn

NEW YORK (S&P Global Ratings) April 13, 2022--S&P Global Ratings said today that its long- and short-term issuer credit ratings on the financial institutions listed below, which have links to Russia, remain on CreditWatch with negative implications. Subsequently, we withdrew the ratings on the entities.

The entities affected are:

  • Cyprus-based nonoperating holding company (NOHC) FG BCS Ltd. and its operating subsidiaries BrokerCreditService (Cyprus) Ltd., BrokerCreditService Structured Products PLC, and BCS Prime Brokerage Ltd. (all rated CCC-/Watch Neg/C);
  • QIWI PLC (CCC-/Watch Neg/C); and
  • Kazakhstan-based SB Alfa-Bank JSC (B/Watch Neg/B and kzBB+/Watch Neg/--).

The CreditWatch placement at the time of withdrawal reflected our view that we could have lowered the ratings further once we had more clarity on the issuers' technical ability and willingness to honor their obligations in full and on time.

Following the EU's decision on March 15, 2022, to ban the provision of credit ratings to legal persons, entities, or bodies established in Russia, we withdrew our outstanding ratings on financial institutions incorporated in Russia (see "S&P Global Ratings To Withdraw Ratings On Russian Entities," published March 21, 2022, "Various Rating Actions Taken On Russian Non-Bank Financial Institutions Then Withdrawn On EU Ban," published March 31, 2022, and "Various Rating Actions Taken On Russian Banks; Ratings Withdrawn On EU Ban," published on March 31, 2022).

We have now decided to also withdraw our ratings on FG BCS and its operating subsidiaries and on QIWI PLC, due to their strong links to Russia. Despite being incorporated outside Russia, FG BCS and QIWI PLC operate predominantly in Russia, where most of their employees and clients are located and they derive most of their revenues from Russian business.

Additionally, we have also withdrawn our ratings on SB Alfa-Bank JSC due to U.S. and U.K. full blocking sanctions introduced in March and April 2022 on Alfa Bank and its subsidiaries, including SB Alfa-Bank JSC.

FG BCS And Operating Subsidiaries

Prior to the withdrawal, our 'CCC-/C' ratings on Cyprus-based NOHC FG BCS Ltd. and its Cyprus-based operating subsidiaries BrokerCreditService (Cyprus) Ltd., BrokerCreditService Structured Products PLC, and U.K.-based BCS Prime Brokerage Ltd. reflected our view of the bleak prospects of the group's global markets investment banking business in 2022, and the restrictions on moving capital and liquidity from its Russian and foreign subsidiaries to the rest of the group due to capital controls by the Central Bank of Russia. In addition, we expect a steep downward revaluation of the group's trading portfolio of Russian equities and bonds, which accounted for about 40% of the consolidated group's equity at year-end 2021: 50% of this portfolio accounts for bonds that the group can hold to maturity, and 12% of equity is hedged by structured products.

Qiwi PLC

Prior to the withdrawal, our 'CCC-/C' ratings on Qiwi, a Cyprus-based holding company, reflected constraints the company faces to meet its short-term financial obligations with investors, following deteriorated operating conditions in Russia and the imposition of capital controls. We note that the holding company relies on dividends being upstreamed from its Russian subsidiaries. These dividends are now subject to capital controls and significant currency devaluation, which might ultimately impair Qiwi PLC's ability to meet its financial obligations.

SB Alfa-Bank JSC

Prior to the withdrawal, our 'B/B' global scale ratings on Kazakhstan-based SB Alfa-Bank JSC (ABK), a subsidiary of Russia-based Alfa Banking Group, reflected our expectations that the deterioration in Alfa Banking Group's overall creditworthiness would adversely affect ABK. Although we have analytically delinked the ratings on ABK from those on Alfa Banking Group (see "Kazakhstan-Based SB Alfa-Bank Rating Lowered To 'B' And Kept On CreditWatch Negative Following Rating Action On Parent," published on March 18, 2022), we still believe that the high credit stress on the parent could have a material impact on ABK.

Related Criteria

Related Research

Ratings List

Remain On CreditWatch

BCS Prime Brokerage Ltd.

FG BCS Ltd.

BrokerCreditService Structured Products PLC

BrokerCreditService (Cyprus) Ltd.

Issuer Credit Rating CCC-/Watch Neg/C
Remain On CreditWatch

QIWI PLC

Issuer Credit Rating CCC-/Watch Neg/C
Remain On CreditWatch

SB Alfa-Bank JSC

Issuer Credit Rating B/Watch Neg/B
Kazakhstan National Scale kzBB+/Watch Neg/--
Ratings Subsequently Withdrawn

BCS Prime Brokerage Ltd.

FG BCS Ltd.

BrokerCreditService Structured Products PLC

BrokerCreditService (Cyprus) Ltd.

Issuer Credit Rating NR
Ratings Subsequently Withdrawn

QIWI PLC

Issuer Credit Rating NR
Ratings Subsequently Withdrawn

SB Alfa-Bank JSC

Issuer Credit Rating NR
Kazakhstan National Scale NR
NR--Not rated.

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. A description of each of S&P Global Ratings' rating categories is contained in "S&P Global Ratings Definitions" at https://www.standardandpoors.com/en_US/web/guest/article/-/view/sourceId/504352 Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column. Alternatively, call one of the following S&P Global Ratings numbers: Client Support Europe (44) 20-7176-7176; London Press Office (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; or Stockholm (46) 8-440-5914

Additional Contact:Financial Institutions EMEA;
Financial_Institutions_EMEA_Mailbox@spglobal.com

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