1 July 2010
Moody’s Investors Service has yesterday announced the update on credit opinion on Bank Vozrozhdenie. The bank’s ratings haven’t been changed — long-term rating of Bank Vozrozhdenie was affirmed on the level Ba3 with “Negative” outlook, deposit ratings remained the same Ba3. The bank financial strength rating (BSFR) retained on the level D-.
As it is mentioned in the credit opinion of rating agency, “the rating is supported by the Bank’s adequate franchise in retail and SME banking, entrenched positions in the Oblast of Moscow, relatively conservative risk-profile, solid fee-generating capacity and adequate efficiency”.
At the same time a number of factors which restrain the bank’s rating were mentioned — “deteriorating asset quality due to a volatile macroeconomic environment in Russia, high single-name and industry exposures and weak bottom-line profitability due to loan loss provision expenses.” In the Moody’s opinion, following factors could have positive impact on credit ratings — a steady increase in market share, particularly in retail and SME segment combined with sustainable improvements in profitability and efficiency as well as progress in risk-management procedures.
“Chosen strategy justified itself once again — sound client base and prudent risks assessment allowed us ti retain our credit ratings despite challenging market environment. During the recent year the bank paid particular attention to liquidity and resources management — we endeavored to reduce our dependence on market fluctuations and virtually returned back to our traditional funding mix together with maintaining high level of liquidityand sound capital adequacy.” — commented Andrey Shalimov, the Head of Bank’s Treasury.
Bank Vozrozhdenie positions itself as a “community bank for SMEs and individuals”, and pursues a strategy of organic growth in the European part of Russia. The bank has a large client base of 1.5 million individuals and 56.000 companies. It ranked 26th among Russian banks by assets, 4th by lending to SMEs, 12th by retail deposits and 9th by banking cards issued.