Rating agency RAEX (Expert RA) has assigned a creditworthiness rating of B++ (the acceptable level of creditworthiness) to Moscow-based Krosna-Bank. The rating carries a stable outlook.
The agency noted that key factors which positively impacted the bank's rating are well-balanced assets and liabilities of the bank in the short term, (N2 equals 61.6%, N3 is equal to 133.8% as of April 1, 2015) and the low portion of NPLs in the credit portfolio (0.2% as of the balance sheet date). The bank's rating is backed by the high portion of securities which are on the Bank of Russia's Lombard List (100% of the portfolio) and the bank's access to sources of extra liquidity (as of early April the portfolio of highly liquid unencumbered securities accounted for 23.5% of the funds borrowed).
"The agency positively assesses plans unveiled by the bank's executives to contain costs and increase equity in 2015," RAEX director for banking ratings Stanislav Volkov pointed out.
Main factors constraining the rating are low capital adequacy ratios (N1.0 was 11.4%, while N1.2 equaled 6.8% as of April 1), and low business profitability. Furthermore, the bank's rating is under pressure from high concentration of borrowed funds in terms of large creditors and its reliance on household funds as a source of funding (form 59.4% of liabilities) amid their low geographical diversification.
