OREANDA-NEWS. According to the agency, the change in outlook reflects stable growth coupled with an adequate capital base; an increasingly diversified business; a capital investment by M. Gutseriev; and the significant business contacts and lobbying capacity of the Bank's principal owner.

The rating is based on the support of a financially-solid owner; an established business and solid market positions; a stable corporate client base; and high current liquidity.

Constraining factors include exposure to large-scale credit risks; moderate dependence on retail deposits; and a modest interest margin.

B&N Bank is a major private-sector bank controlled by Mikail Shishkhanov; former majority shareholder M. Gutseriev acquired a stake of roughly 20% in early 2014. The Bank sits at the centre of a group of finance companies, but the subsidiary Bashinvestbank was merged into B&N late last year. Its market presence is well-developed, stable and growing in the case of both corporate and retail services - particularly personal deposits - and the service network is geographically diverse. The Bank is moderately active in the financial markets, including the market for debt capital. A long-term strategy developed in partnership with McKinsey & Co. calls for modernising and diversifying its retail product line; increasing the density of its service network; wider use of debt financing; and greater diversification of client loans by both industry and individual borrower.

Own funds are sufficient and of good quality and the Bank is well-placed to access fresh capital. Its management model and the resources of its principal shareholder are sufficient to maintain stable operations in the event of macro-economic stresses. External funding is solid, with growth reported in all main categories; dependence on retail deposits is offset by rising corporate client balances and access to debt market capital. Asset quality is rated satisfactory. Earnings performance is likewise satisfactory. Risk sensitivity is moderate. Overall liquidity is healthy and current liquidity reserves are high.