Rating agency Expert RA has given a B++ creditworthiness rating (acceptable creditworthiness) to Ecoprombank. As the agency said in a press release, the main factor having a positive impact on the bank’s creditworthiness was the high capital adequacy ratio (23.6% as of January 1, 2009). Support on the part of the bank’s major shareholders is also viewed as a tangible positive. “The lender’s major shareholders are big chemical enterprises (including export-oriented Silvinit and Mineral Fertilizers), that are its key clients at the same time," noted Irina Velieva, head of the lending institutions ratings service at the agency. She added that strong financial opportunities of these concerns are underscored by the fact that last year using cash of its current shareholders the bank’s capital more than tripled and this year the lender’s owners are prepared to lift the equity by another Rub 3.3 bln to Rub 5 bln.
The decisive factor putting a lid on the rating is the deteriorating quality of the structure of the assorted loans portfolio, as in December 2008 bad debts nearly tripled (the portion of bad debts jumped from 10.3% as of December 1, 2008 to 30.8% as of January 1, 2009, while troubled loans doubled from 0.8% to 1.8%). The rating is negatively impacted by poor diversification of funds attracted in terms of sources and maturity (more than 50% of all obligations falls to the funds of shareholders and related concerns), the acceptance of a substantial currency risk (the sum of open currency positions in dollars and euros equaled 8.4% as of January 1, 2009) and also an increase in corporate loans overdue in Q408.
