S&P upgrades Russian International Industrial Bank one notch to B

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MOSCOW, October 17 (RIA Novosti) - International rating agency Standard & Poor's announced Monday that it had raised its long-term counterparty credit rating on private Russia-based International Industrial Bank (IIB), or Mezhprombank, to B from B- with a positive outlook.

The agency also confirmed the bank's short-term counterparty credit rating at C.

"The ratings on IIB reflect its still-high concentrations of large single-party lending and funding exposures, and its dependence on its owner's continued favorable business and political standing," Standard & Poor's credit analyst Ekaterina Trofimova said. "These negative factors were partly offset by the bank's very strong capital position and satisfactory financial

performance."

With assets totaling $2.1 billion as of June 30, 2005, IIB is one of Russia's 15 largest banks.

"IIB's future creditworthiness will depend on a continued strong financial profile and a deepening of its franchise, in ways not linked to its owner's political and business connections. The ratings on the bank are also contingent on developments in the Russian economy, including the pace and substance of ongoing legal and regulatory reforms," the agency said.

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