S&P Global Ratings has changed Vozrozhdenie Bank’s ratings to “B / B”

19 December 2017

S&P Global Ratings affirm the bank’s long- and short-term credit ratings at “BB-/B”; the outlook remains “Negative”.

S&P Global Ratings has changed the bank’s long-term credit rating from “B+” to “B”. At the same time, the bank’s short-term credit rating was remained unchanged at “B”.

“The downgrade of Vozrozhdenie Bank reflects our expectation that it could face contagion risks. We aim to resolve CreditWatch placement within the next three months, when we get better clarity on Vozrozhdenie Bank’s ability to sustain its business franchise and maintain liquidity cushions,” noted Ekaterina Marushkevich, primary credit analyst at S&P Global Ratings.

“We don’t share the rating agency’s apprehension, as we are independent of situation with other banks. Vozrozhdenie Bank is a stand-alone credit institution with its own license, management bodies and shareholder structure. Besides, the agency’s opinion considers neither operational nor financial indicators of V.Bank that reveals subjective approach to rating forming,” commented Chairman of the Management Board Mark Nakhmanovich. “In the recent quarters we substantially raised business efficiency and enhanced the capital, while the bank’s liquidity management and risk management policy is in line with the best European practices. Since October 1, we have additionally increased our liquidity cushion by 62% to Rub 78 billion, our client sources see steady growth outpacing the sector. and the credit quality improves. We believe that the bank is safe from reputational or regulatory risks.”

The bank showed strong performance in 9M 2017 with Rub 2.7 billion profit under IFRS. Retail clients’ funds increased by 5% to Rub 141 billion outpacing the market’s dynamics of 2%. The capital calculated in accordance with the requirements of Basel III grew by 6% YtD to Rub 33 billion and the capital adequacy ratios calculated in accordance with the requirements of the Bank of Russia strengthen: as of September 30, 2017 total capital adequacy ratio (N1.0) and common equity Tier I capital adequacy ratio (N1.1) were 12.5% and 8.1%, correspondingly, while the minimum acceptable levels were set at 4.5% and 8.0%.

S&P Global Ratings has changed Vozrozhdenie Bank’s ratings to “B+ / B”
Moody’s Investors Service upgraded Vozrozhdenie Bank’s bonds rating to Baa2