National Rating Agency has affirmed Mezhtopenergobank's credit rating at AA- and has cut the rating outlook from stable to negative.
Among factors supporting the rating the agency points to the lending institution's sufficient capitalization, the high quality of the securities portfolio and the comfortable level of liquidity. The bank's shareholders are interested in the bank's further development and holds sufficient resources for support.
Factors that prompted the agency to assign a negative rating outlook include the bank's slower development, including due to the current economic environment, the bank's high sensitivity to the interest risk, falling margin of banking operations and the generation of profit using income derived from one-time deals and grant assistance of its shareholders.
The agency said that rating constraining factors are a considerable percentage of loans granted to construction companies and real estate firms that are exposed to high credit risks, rising concentration on the biggest borrowers and the rising dependence of funding on the money of retail customers when the credit portfolio is nearly 100% comprised of corporate loans.
