PRIME. International rating agency Moody’s has affirmed its long-term foreign currency and local currency deposit rating of B3 on Sudostroitelny Bank (SB Bank), a stable outlook, the agency said in a press release.
Furthermore, the agency affirmed its long-term local currency senior unsecured debt rating also at B3, the bank’s short-term deposit rating of Not Prime and BFSR of E+.
Affirmation of SB Bank’s ratings takes into account moderate concentration of the credit portfolio and the clientele, which reflects the bank’s business focus on the SME segment, and also acceptable asset quality.
Moreover, affirmation reflects such weak points of the bank as modest capitalization, low and unstable profitability, limited diversification and the scope of business, and also reliance on large-scale funding, the agency added in the press release.
As a consequence, the bank’s weaker dependence on heavy funding, lower risk appetite and also improved capitalization could lead to the upgrade of SB Bank’s ratings. A downgrade is possible if the bank’s asset quality deteriorates or capital adequacy and liquidity decline sharply.
