Moody's Investors Service has raised the credit ratings of five major Russian banks to the sovereign level, which it upgraded by two notches last week.

Alfa Bank, Gazprombank, Rosbank, Vneshekonombank and Vneshtorgbank on Monday were assigned the maximum possible rating of B1, the sovereign rating. Aljba Alliance was upgraded to B2. All banks had previously been rated B3.

The decision had been expected after Moody's raised the sovereign rating to B1 from B3, analysts said. The size of that upgrade came as a surprise to analysts, who did not expect Russia to be lifted two notches.

Before the sovereign rating boost, several Russian companies received upgrades that "pierced" the sovereign ceiling -- in line with a new strategy that Moody's announced this summer.

However, analysts said Russian banks' ratings were not likely to rise above the sovereign ceiling.

Moody's says the state has not made enough effort to protect the banking system in times of crises, the most striking example being in August 1998, when it let most major banks go under.

The banks will likely keep these ratings for at least six months, after which Russia may come up for an upgrade, said Mikhail Matovnikov of Interfax Rating Agency. "Banks' ratings are going to be held down by the country ceiling in the foreseeable future," he said.

The upgrade will lower borrowing costs for the banks since they will be able to ask the market for lower interest rates, Matovnikov said. Also, the banks will be able to borrow more, he said.

Alfa and Gazprombank already have issued hard currency bonds.

Foreign banks will also be more willing to accept the Russian banks' guarantees, said an expert at the Rating Information Center.