The credit rating status assigned to JSC Bank VENETS (hereinafter, the Bank) reflects ACRA’s opinion about a possible downgrade in the standalone creditworthiness assessment (SCA) of the Bank in the short term due to a substantial decrease in its regulatory capital adequacy ratios (N1.2 stood at 6.163% as of May 1, 2019).

Key rating assessment factors

The Bank’s B(RU) credit rating is based on the relatively low assessment of its business profile with a satisfactory position on capital adequacy and adequate assessment of liquidity and funding. At the same time, ACRA notes that the risk profile assessment negatively affects the final level of the credit rating.

The credit rating status “Rating under revision: negative” reflects the need to obtain additional information about the development of the situation regarding the Bank’s fixed capital adequacy, as well as information material for the SCA and the rating of the Bank. The Agency plans to revise the credit rating status within the next 90 days.

Key assumptions

  • Compliance with the requirements of the Bank of Russia for capital adequacy and liquidity, as well as with other regulatory standards.

Potential outlook or rating change factors

The status Rating under revision: negative assumes with maximum possible probability a change in the rating within the short-term 90-day horizon.

Removal of the credit rating status may be prompted by:

  • Higher capital adequacy ratios.

A negative rating action may be prompted by:

  • Growth of problem assets;
  • Lower capital adequacy ratios;
  • Deterioration in liquidity position.

Rating components

SCA: b.

Adjustments: none.

Support: none.

Issue ratings

No outstanding issues have been rated.

Regulatory disclosure

The credit rating has been assigned under the national scale for the Russian Federation based on the Methodology for Credit Ratings Assignment to Banks and Bank Groups under the National Scale for the Russian Federation and the Key Concepts Used by Analytical Credit Rating Agency within the Scope of Its Rating Activities.

The credit rating of JSC Bank VENETS was first published by ACRA on November 6, 2018. The credit rating is expected to be revised within 90 days following the publication date of this press release.

The credit rating is based on the data provided by JSC Bank VENETS, information from publicly available sources, as well as ACRA’s own databases. The rating analysis was performed using the IFRS statements of JSC Bank VENETS and the statements of JSC Bank VENETS composed in compliance with the Bank of Russia Ordinance No. 4927-U dated October 8, 2018. The credit rating is solicited, and JSC Bank VENETS participated in its assignment.

No material discrepancies between the provided data and the data officially disclosed by JSC Bank VENETS in its financial statements have been discovered.

ACRA provided no additional services to JSC Bank VENETS. No conflicts of interest were discovered in the course of credit rating assignment.

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