Russian rating agency RAEX (Expert RA) has lowered its creditworthiness rating on Nizhny Novgorod-based Forus Bank to B++ (satisfactory level of creditworthiness). The developing outlook was set for the rating, which means the equal likelihood both of the rating being maintained at the current level and upgraded over the medium term. The rating was put under watch.
The bank was previously rated at A (high level of creditworthiness, Sublevel 2), the agency noted.
The rating action was primarily driven by a rise in corporate lending with no collateral of real estate or funds (according to the agency's estimates, these credit claims reached 35% of the bank's capital in January-March 2016). The developing rating outlook relates to the banking group's reorganization, which is scheduled for the third quarter of 2016 and under which the agency expects the bank to deliver on earlier plans to issue additional shares and consolidate its ownership structure (this was previously scheduled for year-end 2015). The rating is also depressed by high dependence of the financial result on volatile components (income from operations carried out with financial derivatives).
Among positive factors the agency highlighted acceptable adequacy of the bank's equity (as of April 1, 2016 N1.0 stood at 13.4%, and N1.2 equaled 11.6%) and moderate concentration of active operations on entities associated with the high credit risk (as of the specified date high credit risks to assets, net of reserves, equaled 18.1%). The bank's rating is maintained by well-balanced assets and liabilities by duration in the long-term horizon (N4 equaled 64.5% as of early April).
