S&P upgraded the ratings of Sovcombank
The international rating Agency S&P Global Ratings (S&P) raised the long-term ratings in national and foreign currencies Sovcombank “B+” to “BB-“, Outlook stable, says the Agency.
“The rating upgrade confirms the continuous improvement of financial results of the Bank and its transformation into a universal Bank with more diversified revenue sources and a more balanced profile of the credit risk”, – said in a release. At the same time, S&P affirmed the short-term rating of the Bank at “B” level. Sovcombank has increased its share in the RosEvroBank to 29%
The Agency said that the rating action reflects its view that the Bank has achieved notable success in diversifying the business away from the retail model of monolayer, which proved to be unstable in Russia due to the economic turmoil 2014-2015, during which experienced a serious decline in real disposable income. “Due to a series of recent acquisitions and subsequent strong organic growth in 2015-2016 , the Bank has diversified its loan business, and also significantly increased the proportion of Agency and Commission business,” reports S&P.
The stable Outlook reflects the Agency’s view that the Bank must maintain its financial performance in the coming year and a half, including good indicators of portfolio quality and high profitability, despite a challenging, albeit recovering economic situation in Russia. While S&P does not expect any negative developments associated with the recent acquisitions of the Bank.
According to BIR Analyst, on July 1 of the current year Sovcombank took 18th place in the Russian banking system with assets of 620 billion rubles, own funds amounted to RUB 60.9 bn, funds of the population – 242,1 billion.
In the case of a significant deterioration in the quality of the loan portfolio Sovcombank possible negative rating action. “The rating upgrade is unlikely in the case of long-term conservation of the current difficult macroeconomic situation in Russia”, – said S&P.
“S&P dispels recent doubts about the ability of long-term successful work of private banks in Russia … Despite the difficult external environment, the Bank continues to efficiently and transparently to develop,” – said RIA Novosti the rating upgrade Chairman of the Board of Sovcombank Dmitry Gusev.