August 02, 2011 |
|London, 01 August 2011 -- Moody's Investors Service has today affirmed the|
following ratings of Akibank: the standalone E+ bank financial strength
rating (BFSR), which maps to B3 on the long term scale; the B3 long-term
foreign and local currency deposit ratings, and the Not Prime short-term
foreign and local currency bank deposit ratings.
Moody's affirmation of Akibank's ratings is based on the bank's audited
financial statements for 2010 prepared under IFRS, and its H1 2011
unaudited results prepared under the local GAAP.
"Moody's affirmation of Akibank's ratings, with a stable outlook,
reflects the bank's modest performance during the recent global financial
crisis, with evidence of the bank's asset quality deteriorating to around
the average for the Russian banking system," says Maxim Bogdashkin, a
Moody's Assistant Vice-President and lead analyst for the bank. Akibank's
total non-performing loans -- including loans overdue for more than 90
days and loans repaid via collateral foreclosure -- peaked at around 18%
of total loans as at YE2010; the bank's net interest margin narrowed to
4.6% in 2010 from average of 7.5% for the three-year period 2007-2009.
The bank remained profitable over these years, although its net income
remains low due to continuing loan loss charges.
Moody's notes that Akibank's ratings are constrained by its high risk
concentrations, with the exposure to 20 largest borrowers exceeding 2.5x
total capital, and with high dependence on a single group of depositors
accounting for around a third of total liabilities as at H1 2011. The
bank's business continues to be dominated by personal relationships of
its major private shareholder, thus rendering it highly exposed to
key-person risk. The level of related-party transactions, albeit
comparable with some other Russian banks, is high with total exposure
accounting for around Tier 1 capital as of YE2010.
At the same time, Moody's notes that Akibank maintains a relatively
developed branch network in the Republic of Tatarstan and its image is
additionally supported by a reputable portfolio shareholder, East
Capital, a private equity fund that holds a 19.99% stake in the bank.
The bank's capital buffer, which was supported by capital increases in
2008 and 2009, and the bank's loan loss reserves confer relatively good
protection from loan losses that could materialise in the medium term.
|Full company name||Joint Stock Commercial Mortgage Bank "AKIBANK" (Public Joint Stock Company)|
|Country of risk||Russia|
|Country of registration||Russia|