Russian rating agency AK&M has affirmed its B++ national scale creditworthiness rating on Moscow-based Technology Development Bank, reducing the rating sublevel from 1 to 2. The rating outlook is stable.
The primary reason behind the revision of the rating sublevel is a change in the bank's liquidity in 3Q 2015, the agency noted in a press release. In the third quarter of 2015 the bank's N3 declined by 9.4%, equaling 53.65% as of November 1 against the minimum threshold of 50%. Analysts think that this circumstance raises liquidity risks if a stress scenario unfolds.
Also, AK&M paid attention to a considerable rise in the flow of incomplete foreign currency transfers of clients' funds. Since June 2015 foreign currency transfers have more than doubled (from Rub 404 mln to Rub 953 mln).
As a positive factor the analysts pointed out that the bank maintains its capital adequacy at a steadily high level. This year the lender's N1.0 has not dropped below 22%, and as of November 1, 2015 it was equal to 23.55% against the CBR statutory threshold of 10%. "This creates prerequisites for the expansion of operations in order to boost aggregate income, and will also enable the bank to offset risks if it is necessary to wire more to provisions," the rating agency thinks.
