21 December 2012
Moody’s Investors Service international ratings agency affirmed long-term credit rating of Bank Vozrozhdenie at the level of “Ba3” with “Stable” outlook.
In its rating report, Moody’s emphasizes:
- entrenched position of V.Bank in SME and retail banking in Moscow Oblast;
- adequate capital adequacy and modest assets quality;
- good funding and liquidity profile.
“We are pleased that in the current uncertain environment the agency recognized our strengths and maintained “Stable” outlook for V.Bank rating, while the Russian banking system outlook remained “Negative”, — commented Deputy Chairman of V.Bank Management Board Andrey Shalimov. “Next year, we are going to focus on improving profitability and efficiency that might have a positive impact on the bank’s rating provided that capitalization level is stable. We will further proceed in developing our business and working on the asset quality in line with our traditional risk management approach recognized as ‘healthy and relatively conservative in the Russian context’ by the agency”, — continued Mr. Shalimov.
One of the key positive factors for the bank’s rating was Capital Adequacy Ratio (CAR) that reached 14.2% in Q3 2012, supported by the first tranche of the subordinated deposit raised in 2012. It was included into the calculation of Tier-2 capital in accordance with Basel standards. “We view as positive that V.Bank withstands both our central scenarios, without total CAR dropping below 10%”, noted analysts of the rating agency.
Bank Vozrozhdenie maintains adequate liquidity position, while a large core deposit base of corporate and individual clients remains its key funding source. The bank’s reliance on market sources of funding is relatively low: Bank Vozrozhdenie does not resort to financing from the Bank of Russia that was also considered as a positive factor in the rating report. Loan-to-deposit ratio stood at 91% that was favorably assessed in comparison to the market average of 110%.
Analysts indicated that sustainable improvements in profitability, efficiency and asset quality, together with stable capitalization levels, could positively affect the rating level. At the same time a material deterioration in asset quality, capitalization, liquidity or profitability, or noticeable weaking in business positions in Moscow oblast could put downward pressure on the bank’s rating.