OREANDA-NEWS. December 04, 2014. Standard & Poor’s Ratings Services has affirmed the long- and short-term credit ratings of Bank Vozrozhdenie at ‘BB-/B’ on the global scale and ‘ruAA-‘ on the Russia national scale, with the ‘Negative’ outlook.

“Despite challenging operating environment, V.Bank’s results allowed Standard & Poor’s to affirm the ratings intact. Fundamentally, the business model remains attractive, based on the enduring funding structure and capacity to generate well-balanced operating income.

In recent years, we have been working a lot on improving risk-management processes to strengthen our positions in case of macroeconomic deterioration. And now we are glad to see positive assessment of our efforts and BIS strength by the rating agency”, — commented Andrey Shalimov, Deputy Chairman of the Management Board.

According to the rating agency analysts, V.Bank’s relatively conservative risk taking approach could from one hand limit the business expansion but from the other hand — bear some positive fruits in terms of credit losses and related pressure on capital. The bank’s revenue base remains broadly stable, indicating sustainable earning power in its core banking business. The negative outlook reflects the increasing challenges resulting from the difficult operating environment.

“Overall, the earnings structure is healthy, with about 95% of revenues coming from interest, fees, and commissions. Despite notable market turbulence in Russia in 2014 this core income demonstrates stability with lower than in closest peers reliance on market-sensitive income”, noted Sergey Voronenko, Associate Director of Standard & Poor’s.

The outlook could be revised back to stable in case of economic conditions easing, improvement in the business diversity and market positions while maintaining asset quality and funding profile at levels not worse than the industry average. At the same time, the bank’s long-term rating could be lowered if the operating conditions start to have material negative impact on the bank’s financial standing that may lead to sharp and unexpected deterioration in the bank’s risk profile.