Moody’s Investors Service changes outlook to stable on Vozrozhdenie Bank’s deposit ratings

20 December 2016

Moody’s Investors Service has affirmed the long-term local and foreign-currency deposit ratings of Vozrozhdenie Bank at B1 and changed the outlook for these ratings to stable from negative.

The rating agency has also affirmed the bank’s Counterparty Risk Assessment of Ba3(cr).

Moody’s Investors Service noted that the affirmation of the B1 deposit ratings with the stable outlook reflected V.Bank’s recently stabilized credit profile with recovering profitability and its expectation of lower credit costs in the next 12 to 18 months.

Andrey Shalimov, Deputy Chairman of the Management Board commented, “Over the previous months asset quality deterioration had been the key factor that negatively affected our profitability and constrained positive changes in the bank’s credit ratings. We have adjusted credit risk-metrics and focused our attention on limiting problem loans build-up. In the environment of the country’s macroeconomic gradual stabilization, rating affirmation with a stable outlook provides evidence of the bank’s readiness for exploiting opportunities which we expect in the next stage of the economy cycle. We have maintained our key competitive advantages: our solid funding base, a good liquidity profile and our outstanding expertise in SME and retail business. These will support the bank’s sustainable business development and further strengthen its financial position and capital”.

The agency expects V.Bank to report a further decline in credit costs that will support profits and will help the bank to enhance its capital buffers. Given this, Moody’s has stabilized the outlook on the bank, whose credit profile the rating agency expects to remain stable and supportive of the current rating levels in the next 12-18 months, amid an improving operating environment.

Vozrozhdenie Bank reached sustainable profitability
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