OREANDA-NEWS. RusRating has changed the outlook on Sovcombank's credit rating from stable to positive.

The rating itself is unchanged at "AA-” on the national scale and "BBB-” on the international scale.

The change in outlook reflects steady growth in market positions coupled with stable financial indicators and acceptable asset quality, the successful integration of GE Money Bank (whose formal merger into Sovcombank is scheduled for completion in October this year) and the proven effectiveness of the Bank's chosen development strategy.

The rating itself is based on a wide regional service network and growing business, consistently healthy financial results and effective management.

Constraining factors include a business focused on the retail market segment, where growth is slowing and credit risks are trending upward.

Sovcombank is one of Russia's top ten regional banks by assets. In June 2012 the Netherlands-based holding company TBIF BV, representing the financial arm of the multi-profile Kardan Group, disposed of its capital stake; as a result the Bank is now wholly-owned by its own top management in partnership with Russian businessmen. Retail services are its priority line of business, with an emphasis on loans for borrowers in higher age categories. Sovcombank has a wide service network that covers most Russian regions. As demand for personal loans contracted in response to the recent crisis it expanded its activity in the securities market. Growth strategy remains centred on retail services, including loans. In accordance with this strategy in February 2014 it acquired ZAO GE Money Bank; a merger is scheduled for completion in October this year.

Capital is sufficient; its quality and stability are judged healthy based on the Central Bank's Basel III standards. External funding is dependent on retail deposits but its overall stability is rated favourably in the light of past trends. Asset quality is judged satisfactory. Earnings performance is healthy and the impact of variable factors is moderate. Overall risk sensitivity is likewise moderate. Liquidity is sufficient.