LONDON, Feb. 25 (UPI) -- Ratings agency Moody's lowered its assessment of seven Russian financial institutions, including the banking arm of Gazprom, because of recessionary threats.

The downgrade for Sberbank, Bank VTB, Gazprombank, Russian Agricultural Bank, Agency for Housing Mortgage Lending, Vnesheconombank and Alfa-Bank follows a lowering by Moody's of the government debt rating to Baa3, the lowest investment grade rating, last week.


Moody's said it also lowered the financial strength ratings of Sberbank, Bank VTB, JSC , Gazprombank and Alfa bank.

"This is due to Moody's expectation that the prolonged recessionary environment in Russia will produce a very challenging operating environment for the country's leading banks and thereby impact their financial fundamentals," the ratings agency said in a Tuesday profile.

Standard & Poor's and Fitch Ratings each lowered their ratings for Gazprombank and others earlier this year. The financial arm of the Russian energy company is the subject of sanctions imposed in Russia in response to its policies regarding crises in Ukraine.

Those sanctions, coupled with a weak market for crude oil, a key Russian export, have pushed the Russian economy to the brink of recession.

The Russian Ministry of Economy last week said it expected export revenues to decline as Russian energy products wane from the world market. Assuming an average crude oil price of $50 per barrel, the ministry said it expected gross domestic product to contract by 3 percent. The economy in 2015, it said, will enter a "prolonged decline."

Russian Finance Minister Anton Siluanov last week criticized Moody's government debt assessment as pessimistic and out of step with developments in the oil-laden economy.

"I suspect that in making this decision to lower the rating the agency was guided by political factors above all," he added.