OREANDA-NEWS. National Rating Agency has lowered its credit rating on Plus Bank OJSC to 'BBB+'. The outlook assigned to the rating is negative.

The rating downgrade reflects the considerable weakening of the bank's liquidity position in the second half of the year, with instantly liquid assets (including the balance of Plus Bank's correspondent account with the Bank of Russia) decreasing at a far quicker rate than demand liabilities, and the general reduction of liquid assets in the context of growing liabilities, with the current liquidity (N3) ratio falling in October from 81.18% to 59.15% (slightly above the regulatory minimum of 50%). We also note the significant growth of the bank's loan loss reserves (+70% since Nov. 1, 2014) and allocations to the obligatory reserve fund (+193% since Nov. 1, 2014).

The rating is supported by the improving loan quality, consistently low single-name concentration of the bank's loan book and liabilities, the level of nonperforming loans (3.2% of total loans), which is relatively low for a bank focused on retail lending, good loan-to-security ratio and adequate debt burden.