OREANDA-NEWS. RusRating has lowered the credit rating of OAO Uralsib (Moscow) from "BBB-" to “BB+” on the international scale and from "AA-" to “A+” on the national scale, in both cases with a stable outlook.

According to the agency, the rating cut reflects above-average sensitivity to both credit and market risks coupled with a low capital base; declining managerial effectiveness; and negative financial results.

The rating itself is based on the Bank's systemically-important role in Bashkortostan; shareholder support; a stable client base; and a solid, well-developed presence in virtually all segments of the banking market.

Constraining factors include heavy sensitivity to securities market conditions and volatile earnings; above-average credit and operating risks; and a possible decline in the support available from the Bank's principal beneficiary owner.

About the Bank

Uralsib is a universal financial institution of national significance – one of Russia’s top thirty banks by assets – and has historically had a systemically-important role in the Republic of Bashkortostan. The primary asset of the Uralsib financial group controlled by Nikolai Tsvetkov, it remains a major player in core market segments, including corporate, retail and investment banking, with an extensive service network and established ties to both domestic and western counterparties. Its market share has fallen since the start of 2012, when Tsvetkov shifted his attention to projects outside banking, and his capacity to provide support has declined, as has managerial effectiveness. Uralsib’s own resources are sufficient to maintain stability and a high level of creditworthiness, but to sustain growth and competitiveness the Bank will need to update its strategy, modernise its management systems, take in fresh capital and diversify its ownership structure.

Capital is of satisfactory quality and minimally adequate in terms of scope for asset growth and a possible increase in risks. External funding is diversified by type, but the downward trend in corporate client balances and borrowing from non-resident banks continues, while growth in retail deposits has slowed. Asset quality is rated satisfactory. Profitability is low and financial results are noticeably affected by variable factors. Current liquidity is sufficient but the term structure of the balance sheet implies elevated risks. Overall risk sensitivity is likewise elevated.