Vozrozhdenie Bank : S&P Global Ratings keep Vozrozhdenie Bank’s ratings at “ВВ- / B”

S&P Global Ratings affirm the bank's long- and short-term credit ratings at 'BB-/B'; the outlook remains 'Negative'.

The rating service's experts consider the bank will be in a transition phase, given the likely merger with Promsvyazbank by the end of 2017. In such a scenario, the bank's creditors will benefit from additional government support, which is now available for systemically important Promsvyazbank. In their view, this will compensate for the pressure on Vozrozhdenie Bank's capitalisation.

'Vozrozhdenie Bank has demonstrated good financial results focusing on servicing small and midsize enterprises and retail clients in the wealthy Moscow region over the recent decade, the segments that Promsvyazbank considers its strategic priority. Thus, we believe that the considered merger might be beneficial for both banks,' noted Ekaterina Marushkevich, primary credit analyst at S&P Global Ratings.

'The bank's ratings affirmed at the same level show that we managed to build a sound business model having long-term relations with our clientele in the core of our strategy. It proves its solvency even when the operating environment becomes volatile,' commented Acting Chairman of the Management Board Mark Nakhmanovich.

The experts believe that Vozrozhdenie Bank's retail deposits base, which accounts for about 70% of total deposits, supports the bank's funding profile. They also note adequate liquidity indicators. The share of liquid assets was at a comfort level of 17%, as of June 30, 2017.