Russian rating agency RAEX (Expert RA) has affirmed its creditworthiness rating of A (high level of creditworthiness) on Natsinvestprombank. Meanwhile, the rating revised its outlook for the bank's rating to negative, which means the strong likelihood of the rating being downgraded over the medium term. The agency also reduced the rating sublevel from 2 to 3.
The rating sublevel was cut, first and foremost, as the bank's core capital and capital adequacy ratios remained low (as of November 1, 2015 N1.1 equaled 5.8%, and N1.2 was 6.8%) amid low rates of return (from October 1, 2014 through October 1, 2015 ROE equaled 0.1% for post-tax profit) which limits the potential of raising capital.
Meanwhile, the bank's capital adequacy ratio is under extra pressure from changes in the bank's capital to risk-weighted assets ratio in order to calculate the ratios in January 2016, which stipulates the negative rating outlook. Furthermore, the rating is adversely influenced by a contraction in the turnaround of the corporate credit portfolio.
The rating is still backed by low NPLs on the bank's balance sheet and high coverage of the credit portfolio. Moreover, the agency pointed to the dominance of contingent liabilities, which are classified as Category 1 loans, in the portfolio of guarantees and sureties, and also to the high portion of securities, which are in the Bank of Russia's Lombard List, in the securities portfolio.
