Moody’s Investors Service changed Vozrozhdenie Bank’s ratings

17 April 2018

Moody’s Investors Service downgraded Vozrozhdenie Bank’s long-term local and foreign-currency deposit ratings to B3 from B2 and maintained them on review.

The Agency rationalized its action with prolonged uncertainties regarding the Bank’s future shareholder structure and development prospects and a risk of client base volatility. At the same time, Moody’s Investors Service stated that Vozrozhdenie Bank did not have credit exposure to PSB that it had been affiliated to by common shareholders.

“We understand that Moody’s based its decision on its standard methodology and formal criteria without any consideration of intrinsic changes and events in the Bank. Besides the reference to the shareholders we have not seen any new arguments,” — commented Mark Nakhmanovich, Chairman of the Management Board. “Yes, there is a pending issue with shareholders, but its impact on the Bank’s operations and financial standing is negligible — 2017 results showed the best income in the last 6 years amounting to RUB 3.3 billion, in the last six months we grew our mortgage lending by 60% and doubled our international financing portfolio. We received a positive auditor review from one of TOP 3 audit firms. A new Board of Directors was introduced a month ago. The Board of Directors includes all members of the Management Board, which is an evidence of high confidence in the Bank’s managers. We expect that once the shareholder structure is resolved, the rating agencies will take steps to restore our rating levels.”

Moody’s expects to conclude the reviews within the next three months following the finalization of the change in the ownership structure.

Moody’s Investors Service upgraded Vozrozhdenie Bank’s bonds rating to Baa2
Vozrozhdenie Bank earned RUB 640 million of net profit under IFRS in 3M 2018