Bank Vozrozhdenie's 'B+/B' And 'ruA+' Ratings Affirmed on Stabilized Asset Quality; Outlook Positive - S&P
MOSCOW. June 2 (Interfax) - Standard & Poor's Ratings Services said on Thursday that it had affirmed its 'B+/B' counterparty credit ratings and its 'ruA+' national scale rating on Russia-based Bank Vozrozhdenie. The outlook is positive.
The agency said in a statement: "The ratings reflect our view that Bank Vozrozhdenie's asset quality has stabilized, with liquidity and capital remaining adequate. The bank continues to maintain a cautious risk appetite and risk management is improving. Major rating constraints are the risky operating environment in Russia, Bank Vozrozhdenie's low profitability, and competitive pressure from state-owned banks. At the same time, asset quality problems still remain above their precrisis levels.
"The ratings reflect the bank's stand-alone credit profile and do not include any uplift for extraordinary external support. The largest shareholders of the bank are Russian businessmen Dmitry Orlov, chairman of the management board (30.7%), and Otar Marganiya, chairman of the board of directors (18.6%). JPM International Consumer Holding Inc. holds a minority stake (9.4%).
"With total assets of Russian ruble (RUB) 175 billion (approximately $5.8 billion), Bank Vozrozhdenie ranked among Russia's 30 largest banks on Dec. 31, 2010, and is considered to be one of the largest private sector-owned banks in the country. The bank focuses mainly on lending to small and midsize enterprises, with retail deposits accounting for about two-thirds of its liabilities.
"The positive outlook reflects our view that Bank Vozrozhdenie will continue to follow its cautious business strategy and that asset quality and profitability will gradually improve.
"We would consider a positive rating action if we saw signs of a stronger recovery in earnings, with improving asset quality and continuing adequate capitalization.
"We would revise the outlook to stable if the improvements in the bank's financial profile lost steam and its competitive position were threatened.
"We would take a negative rating action if we saw a more pronounced negative trend in nonperforming loans, or if we saw a prolonged delay in working out existing problem loans and selling repossessed assets, or if the bank's liquidity position were to worsen.
