Russian rating agency RAEX (Expert RA) has cut Russtroybank's creditworthiness rating to B (low level of creditworthiness), with a negative outlook, RAEX reported.
The rating action was driven by the breach in the bank's operations, namely a delay in payments. Analysts still point to the bank's moderately low liquidity cushion (as of October 1, 2015 the portion of LAM in the bank's gross assets equaled 7.2%, while N3, excluding liabilities against demand accounts, was equal to 53.3%), and also to the growing risks of impairment of big loans and low reserves in relation to capital adequacy ratios (as of October 1, 2015 N1.0 equaled 11.0%, and N1.1 was 6.8%).
The rating is also adversely affected by the bank's policy of drawing long-term 'expensive' funding from households and heavy reliance of liabilities on funds of households (as of October 1, 2015 they accounted for 53% of gross liabilities).
Meanwhile, the rating is supported by high coverage of operating expenses by net interest income and net commission income (121.8% in 3Q 2015), acceptable rates of return (ROE equaled 6.9% from October 1, 2014 through October 1, 2015) and moderately low concentration of drawn funds on the biggest creditors/groups of creditors, RAEX added.
