Russian rating agency RIA Rating has affirmed its national scale creditworthiness rating of BBB on StarBank. The rating carries a stable outlook.
The bank's rating is positively influenced by the bank's good liquidity positions in recent months, the agency noted. The lender's instant and current liquidity ratios are far above minimum thresholds. The portion of highly liquid assets is at the acceptable level.
The factor supporting the rating is an increase in the bank's commission income at the beginning of 2015. 1Q net commission income totaled Rub 245 mln vs. Rub 24.3 mln in the year-ago period. The lender's commission income jumped as the bank earned substantial commission income derived from granted loans and income from accounts opened and maintained. Given a contraction in net interest income, higher commission income helps the bank maintain its operating profitability, but the bank's 1Q 2015 net profit turned out to be negative (Rub 3 mln).
The factor constraining the rating is poor diversification of the bank's clientele. Corporate clients, to a large extent, are retailers, builders and food producers. Meanwhile, over 80% of the bank's aggregate credit portfolio falls to 20 largest borrowers, or 380% of equity, which is a very high level. As for liabilities, the bank is nearly 100% dependent on retail deposits. The portion of household funds in the bank's liabilities exceeds 85%, and keeps rising.
The bank's credit portfolio quality tends to deteriorate, the rating agency specified. During the first four months of 2015 the portion of NPLs rose from 1.9% to 5.7% as of May 1. Those of troubled and bad debt also keep growing. The lender's credit risk assessment is positively influenced by the good level of collaterals and guarantees of the credit portfolio. As a whole, the bank's credit risks are satisfactory.
