OREANDA-NEWS. RusRating has lowered the credit rating of OAO KB “Poidem!” from "BB" to “CCC” on the international scale and from "BBB+" to “B-“ on the national scale, in both cases with a stable outlook.

According to the agency, the rating cut reflects increased regulatory and reputation risks affecting the parent ProbusinessBank.

The rating is based on KB “Poidem!”’s limited financial dependence on ProbusinessBank coupled with a high net interest margin.

Constraining factors include high credit risks; high regulatory and reputation risks; a funding base dependent on retail balances (which are more likely to see panic outflows under weak banking sector conditions); a shrinking balance sheet and declining market presence.

About the Bank

Bank “Poidem!” is a smaller private-sector bank and a member of the LIFE group, which includes six banking subsidiaries plus Life Factoring, the real estate developer Probusiness-Development and Probusiness-Bank, the larger financial institution at the head of the group. Bank “Poidem!” itself operates mainly in the consumer loan market, as called for by overall group strategy. Well-developed infrastructure gives it a presence in twenty regions of the country.

Capital is sufficient and of good quality. External funding draws mainly on retail balances and has been solid in the past. Overall asset quality is rated satisfactory but trending downwards as a result of growing sensitivity to credit risks; consumer loans account for the bulk of revenue-generating instruments. Earnings performance is weak. Overall risk sensitivity is elevated. Current liquidity is sufficient and risks to liquidity are judged modest.