OREANDA-NEWS. RusRating has lowered the credit rating of Bank Tavrichesky (OAO) from "BB-" to “C” on the international scale and from "BBB-" to “CC” on the national scale, in both cases with a stable outlook.

According to the agency, the rating cut reflects a likely suspension of the Bank’s license as solvency falls below acceptable levels, as well as uncertainty over a potential financial rehabilitation programme.

The rating is based on the probability of the Bank entering a financial rehabilitation programme.

Constraining factors include a loss of liquidity, the loss of the Bank’s business reputation, and uncertain future prospects.

About the Bank

Bank Tavrichesky is a mid-sized private-sector bank (one of the largest in north-west Russia) that operates mainly in St. Petersburg and the surrounding Leningrad region. Shareholders include a large group of private individuals, among them its own top managers, none of whom controls more than 20% of equity; the largest stakes are held by Chairman of the Board Oleg Zakharzhevski, Board member Ivan Kuznetsov and CEO Sergei Somov. SpareBank 1 Nord-Norge, a major Norwegian bank, is a minority investor. Operations focus on the provision of integrated services to larger and mid-sized corporate clients in the fuel and energy, research and defence technology, construction and machine-building industries. The Bank has actively developed a retail presence via partnerships with corporate clients. Financial market activity is minimal.

Capital is of good quality but capital adequacy is critically low. External liabilities draw equally on corporate and retail client accounts; risks to stability are high. Asset quality is judged satisfactory, reflecting an assessment of client loans. Profitability is low and returns on core operations are modest. Overall risk sensitivity is high. Risks to liquidity are likewise high.