Rating agency Expert RA has assigned a B++ creditworthiness rating (acceptable creditworthiness) to Bank AVB (new brand of Avtovazbank). “The main factor positively impacting Bank AVB’s creditworthiness is high capital adequacy (19.8% as of November 1, 2008)” — the agency’s press service said in a statement.
The crucial factor limiting the rating was a heavy outflow of client funds in October 2008. “Cash withdrawals by clients and lending institutions and also the redemption of bonds presented within the call option were nearly 100%offset by funds borrowed from CBR against collateral of the bank’s credit portfolio. In November 2008 the outflow of client funds virtually stopped (fluctuations equal 1%). With many Level 1 loans (in terms of quality) maintained on its balance sheet, the bank continued to ramp up borrowings from the Bank of Russia” — senior expert of the rating agency’s financial institutions ratings department Stanislav Volkov pointed out.
