Russian rating agency RAEX (Expert RA) has affirmed its creditworthiness rating on Bank of Kazan at A (the high level of creditworthiness, Sublevel 3) and downgraded that on Bank BFA to A (Sublevel 1). The outlook for the rating of two banks is stable, which means the strong likelihood of the ratings being left unchanged over the medium term.
Key factors having a positive effect on Bank of Kazan's rating are the acceptable level of capital adequacy (14.5% as of April 1, 2015), well-balanced assets and liabilities in the short-term horizon and moderately low concentration of active operations on businesses associated with the high credit risk. Furthermore, the bank's rating was buoyed by high security of the credit portfolio (as of April 1, 2015 security given the collateral of securities, sureties and guarantees equaled 344.8%) and the low level of accepted currency risks.
Key factors depressing the bank's rating are the poor credit portfolio quality (the average portion of 4th and 5th quality category loans equaled 10.9% from April 1, 2014 through April 1, 2015) amid an insufficiently conservative reserve policy, and also insufficiently balanced assets and liabilities on the long-term horizon. "We also negatively assess the bank's insufficiently transparent ownership structure as in 2014 its controlling shareholder was a company registered in offshore jurisdiction," RAEX director for banking ratings Stanislav Volkov commented.
Bank BFA's creditworthiness rating was lowered from A+ (the very high level of creditworthiness, Sublevel 3) to A (the high level of creditworthiness, Sublevel 1).
"The bank's rating was downgraded as its net interest income has dropped sharply since the beginning of 2015 and, as a consequence, the bank reported losses," RAEX deputy director for banking ratings Mikhail Doronkin commented. According to him, the bank's net loss totaled Rub 797 mln in January — March 2015.
