Vozrozhdenie Bank : RAEX has assigned ruA- rating to Vozrozhdenie Bank

'We are glad to note that RAEX analysts commended business model of V.Bank, which proved its soundness in tough operating environment more than once and today allows enhancing competitive profile in our target segments. The bank's strength is in loyalty of our clientele and reputation in the finance community that Vozrozhdenie Bank earned during its long history; and we highly appreciate the agency's recognition of our public credit history,' commented Andrey Shalimov, Deputy Chairman of the Management Board.

The analysts mentioned reasonably high probability of financial and administrative state support due to high social importance of the bank, strong positions at the market of banking services (including the Moscow Region) and wide distribution network as the key positive factors for the rating level.

Good coverage of loan book with collateral and low credit risk concentration supported the rating. The agency positively assesses the level of coverage of operating costs with net interest and non-interest income and low concentration on attracted funds. The experts also note high credit quality of securities portfolio that may be used as an additional source of liquidity in the frame of REPO transactions and high level of transparency shown in communication with the agency as positive factors.

RAEX considers Tier-I capital adequacy level as not very high (as at July 1, 2017 N1.2 norm was 8.4%), which pressures the rating along with higher maturity of loans to legal entities and individual entrepreneurs that are often of investment nature. The agency's analysts also point out that insufficiently conservative policy of provisioning loans amid practice of decreasing the estimated value of provisions by amount of collateral restricts the rating level. Thus, the following enhancement of the loan book quality and successful resolution of the current problem cases could become a positive factor supporting the rating in future