The negative rating action follows a significant growth of the credit institution's reputation risk. The Russian Ministry of the Interior's investigative actions and the detention of Russlavbank's Vice President on suspicion of conducting illegal banking operations have triggered a negative response from its market partners (the CONTACT system operators). We tend to believe that the risks incidental to the Bank's operation as the principal settlement agent and clearing center for the CONTACT payment system have soared. A possible decline in the payment system turnover is likely to entail a reduction in the credit institution's earning power. Besides, the Bank's secondary (offspring) brands CONTACT Bank and CONTACT24 will sustain certain damage.

The agency has also revised its rating outlook to negative regarding the risk of a downside scenario for the Bank's further activity as fairly high.