The credit rating of PJSCB “Primorye” (hereinafter, Bank Primorye or the Bank) has been downgraded to reflect the Bank’s worsening capital position, which is determined by the violation of the requirements established by the regulator for the minimum level of Tier 1 capital adequacy (N1.1) and the financial leverage ratio (N1.4) as of the reporting date of November 1, 2025 against the backdrop of losses recorded in 2024–2025.
Taking that into account, ACRA has also lowered its assessment of the Bank’s business profile to relatively low, while maintaining a satisfactory assessment of the risk profile and increasing the score for funding and liquidity to adequate.
The outlook has been changed to Developing to take into account, among other things, information provided by the Bank stating that from November 10, 2025 its capital adequacy ratios are above the minimums, as well as its plans to considerably increase charter capital. Bank Primorye’s website gives information on an extraordinary general meeting of shareholders scheduled for December 2025, with an agenda for increasing the charter capital.
The Watch Status reflects the need to monitor the implementation of measures aimed at restoring the values of regulatory ratios, the implementation of which may take a certain amount of time, as well as the need to obtain additional information to assess other factors that may affect the Bank’s standalone creditworthiness assessment (SCA).
Bank Primorye is among the 150 largest Russian banks. The Bank is focused on corporate lending services (mostly in Russia’s Far East), and trading in securities and the interbank market.
KEY ASSESSMENT FACTORS
The business profile assessment has been downgraded from moderately low to relatively low (b-) due to the deterioration of the assessment of corporate governance quality as a result of the reduction of mandatory ratios. The Agency notes the medium diversification of the Bank’s sources of operational income that mainly include investments in debt securities and corporate lending services. There is a certain risk of regional concentration since the largest portion of the loan book is represented by borrowers from the country’s Far East.
The capital adequacy ratio has been downgraded to critical due to the decline of regulatory ratios (N1.1 = 2.83%, N1.2 = 6.34%, N1.0 = 9.72% as of November 1, 2025), as well as the averaged capital generation ratio (AGCR) for 2020 to 2024 falling due to losses (RUB 1.1 bln over 2024 and RUB 2.6 bln over 9M 2025) incurred as a result of a narrowing interest margin on the back of growth of the key rate. ACRA notes that after the specified reporting date, the ratios recovered somewhat, however, the margin of safety for some of them remains minimal.
Operational efficiency is another negative factor in the capital adequacy assessment — a high CTI (the ratio of operating expenses to operating income), the formation of which is influenced by the presence of losses from operating activities, coupled with an NIM (net interest margin) value below the average for banks of a similar profile.
The satisfactory risk profile assessment reflects the medium level of non-performing and potentially non-performing loans and heightened concentration on the 10 largest groups of borrowers. The quality of the Bank’s investments in securities and interbank loans, which account for 64% of assets, is acceptable.
The funding and liquidity assessment has been upgraded to adequate due to the improvement of the short-term liquidity shortage ratio and long-term liquidity shortage ratio to strong. Approximately 68% of the Bank’s assets are highly liquid assets (the OFZ portfolio accounts for 57% of assets). The funding factor is assessed taking into account the increased concentration of funds from the largest creditor and the 10 largest creditors (groups of creditors).
KEY ASSUMPTIONS
- The Bank executing its plans to significantly increase charter capital.
POTENTIAL OUTLOOK OR RATING CHANGE FACTORS
The Developing outlook assumes a variety of trends: the rating may stay unchanged, be upgraded or downgraded within the 12 to 18-month horizon.
A positive rating action may be prompted by:
-
Better capital adequacy ratios;
-
Significantly lower volume of non-performing and potentially non-performing assets;
-
Lower concentration on the largest funding source.
A negative rating action may be prompted by:
-
Decline in capital adequacy ratios/violation of capital adequacy ratios;
-
Significant growth of non-performing and potentially non-performing loans due to a rapid expansion of the loan portfolio;
-
Growing concentration on the 10 largest groups of borrowers;
-
Growing volume of investment property on the Bank’s balance sheet;
-
Higher level of market risk
-
Deterioration of liquidity metrics.
The Watch Status assumes that a rating action is highly likely on a horizon of up to 12 months.
Removal of the Watch status and upgrading the credit rating may be prompted by:
-
Improved capital adequacy ratios;
-
Receipt of other information to clarify the Bank’s SCA at a level that is sufficient to affirm the current credit rating.
Removal of the Watch status and downgrading the credit rating may be prompted by:
-
Decline in capital adequacy ratios/violation of capital adequacy ratios;
-
Receipt of other information sufficient to downgrade the SCA.
RATING COMPONENTS
SCA: b-.
Adjustments: none.
Support: none.
ISSUE RATINGS
There are no outstanding issues.
REGULATORY DISCLOSURE
The credit rating has been assigned to PJSCB “Primorye” based on the following methodologies: the Methodology for Assigning Credit Ratings to Banks and Bank Groups under the National Scale for the Russian Federation to calculate the SCA and determine the credit rating and the credit rating outlook of PJSCB “Primorye” under the national scale for the Russian Federation and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities to ensure consistent and uniform application of ACRA’s methodologies, rating scales, models, and key rating assumptions.
The credit rating of PJSCB “Primorye” assigned under the national scale for the Russian Federation was published by ACRA for the first time on March 20, 2023.
The credit rating and its outlook are expected to be revised within one year.
The Watch Status is expected to be retained for the credit rating for one year.
The credit rating was assigned based on data provided by PJSCB “Primorye”, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the IFRS accounting (financial) statements of PJSCB “Primorye” as of June 30, 2025 and the financial statements of PJSCB “Primorye” drawn up in compliance with the requirements of the Bank of Russia.
The credit rating is solicited and PJSCB “Primorye” participated in its assignment.
In assigning the credit rating, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided no additional services to PJSCB “Primorye” during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
