Fitch Places Probusinessbank on RWN－kahyka的部落格

(The following statement was released by the rating agency)
MOSCOW/LONDON, October 15 (Fitch) Fitch Ratings has placed
Russian-based
Probusinessbank's (PBB) ratings, including its 'B' Long-term
Issuer Default
Rating (IDR), on Rating Watch Negative (RWN). A full list of
rating actions is
at the end of this commentary.
KEY RATING DRIVERS
The RWN primarily reflects Fitch's concerns about the liquidity
of the bank's
securities book, given that it is virtually all held outside of
Russia and has
largely not been traded or refinanced over an extended period of
time. The RWN
also reflects uncertainty concerning the recent review of the
bank by the
Central Bank of Russia (CBR) and the potential impact of the
recent licence
withdrawal from a sister bank.
PBB's consolidated securities book increased to RUB47bn (27% of
group assets) at
end-1H14 from RUB42bn (25%) at end-2013 and RUB27bn (15%) at
end-2012. The
portfolio is virtually all held on PBB's balance sheet
(comprising 48% of
standalone assets at end-8M14), and Russian government bonds
make up the bulk of
the book.
Unlike most banks in the sector, PBB (i) pledges only a small
amount of its
securities (about RUB3bn on average) to obtain repo funding from
CBR; (ii) holds
a portfolio with relatively long duration of around three to
four years,
compared with peers' typical 1-1.5 years; and (iii) holds a
large majority of
the portfolio (RUB42bn) in two Cyprus-based custodians which are
subsidiaries of
Russian privately-owned brokers, in contrast to most Russian
banks, which keep
their government bonds in the National Reserve Depositary (NRD,
a subsidiary of
the Moscow Stock Exchange) in order to be able to obtain CBR
repo funding. In
Fitch's view, the economic rationale for holding such a large
unrepoed
securities book is somewhat unclear. The agency therefore
believes it is
necessary to further investigate the nature of these holdings
and any potential
impact it might have on its assessment of the bank's liquidity,
asset quality
and solvency.
In September, the CBR withdrew the licence of Bank24.ru, a
sister bank of PBB
(reportedly for non-compliance with anti-money laundering
regulations), only a
few months after it was deconsolidated by PBB. According to
management, PBB and
other group banks were reviewed by the CBR in August, and the
results of that
review should be available soon.
PBB's 'B' Long-term IDR and 'b' Viability Rating reflect the
bank's solid
reported pre-impairment profitability and liquidity. However,
the ratings also
consider the bank's moderate capitalisation, increased credit
losses in the
bank's retail loan portfolio and contingent risks relating to
the acquisition in
1Q14 by the bank's shareholders of a smaller, failed Russian
bank, Solidarnost.
RATING SENSITIVITIES
To resolve the RWN, Fitch will seek further clarification on the
nature of the
bank's securities holdings and consider the impact of this on
the bank's
liquidity, asset quality and solvency. The agency will also
assess the results
of the CBR review.
The ratings may be downgraded (potentially by more than one
notch) if Fitch
believes the securities book is not readily available to the
bank as a potential
source of liquidity, or if other significant risks arise as a
result of the CBR
review. However, the ratings may be affirmed if concerns
relating to the
securities book are alleviated and the CBR review does not
identify any new,
material issues.
The rating actions are as follows:
Long-term foreign currency IDR: B; placed on RWN
Long-term local currency IDR: B; placed on RWN
Short-term IDR: 'B'; placed on RWN
Viability Rating: 'b' placed on RWN'
Support Rating: 5 unaffected
Support Rating Floor: No Floor; unaffected
National Long-term rating: 'BBB(rus)'; placed on RWN
Senior unsecured Long-term Rating: 'B-'/RR4; placed on RWN
Senior unsecured Short-term Rating: 'B'; placed on RWN
Senior unsecured National Rating: 'BBB(rus)'; placed on RWN
Contact:
Primary Analyst
Anton Lopatin
Director
+7 495 956 70 96
Fitch Ratings Moscow
26 Valovaya Street
Moscow 115054
Secondary Analyst
Timur Lebedev
Analyst
+7 495 956 99 83
Committee Chairperson
James Watson
Managing Director
+7 495 956 66 57
Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153,
Email:
elaine.bailey@fitchratings.com; Julia Belskaya von Tell, Moscow,
Tel: +7 495 956
9908, Email: julia.belskayavontell@fitchratings.com.
Additional information is available at www.fitchratings.com.
Applicable criteria, 'Global Financial Institutions Rating
Criteria', dated 31
January 2014, is available at www.fitchratings.com.
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
here
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Solicitation Status
here
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