Russian rating agency RAEX (Expert RA) has affirmed its credit rating of B++ (satisfactory level of creditworthiness) on Moscow-based ProCommerce Bank. The rating outlook was revised from negative to stable.
Key factors producing a positive impact on the rating are the bank's high capital adequacy (N1.0 and N1.2 stood at 40.5% as of July 1, 2016), well balanced assets and liabilities in the short-term outlook (as of the balance sheet date N2 equaled 84.9%, and N3 was 114.7%) and access to excess liquidity, RAEX noted. In addition, the agency pointed to the good quality of granted guarantees and sureties, and the bank's high information transparency. "As relations between Russia and Turkey normalized, the agency does not expect the default rate of the bank's credit portfolio to increase further, which resulted in the upward revision of the rating outlook," RAEX managing director for banking ratings Stanislav Volkov commented.
The rating is mainly depressed by the fact that the bank's equity (Rub 330.5 mln as of early July) is close to the minimum capital set by the Bank of Russia. The rating is adversely affected by high concentration of active operations on a company associated with the highest credit risk (14.6% of the assets as of the reporting date), the weakening credit portfolio quality (during the year since July 1, 2015 overdue debt in the total credit portfolio has increased 4% to 10.6%), and the steadily high portion of operating costs in average assets (17.7% for the given period). Furthermore, the rating is constrained by the imbalance between turnover on customers' settlement accounts and the bank's assets, which results in higher costs to keep the internal control system running properly.
