OREANDA-NEWS. National Rating Agency has affirmed its national scale ‘A+’ credit rating on INTERPROMBANK CJSC JSCB (IPB). The outlook for the rating is negative.

The negative rating outlook reflects the company’s considerably weakened liquidity position, as evidenced by its financial reporting as of Apr 1, 2015, namely, the decreasing liquid assets compared to rising demand liabilities, falling quick ratio, growing asset-liability mismatch, caused, among other things, by increasing short-term liquidity gaps (i.e. between assets and demand liabilities during the 1-7 days bucket) and lack of substantial sources of additional liquidity (90% of the trading portfolio is used to raise funds through repo transactions). In our opinion, these trends are limiting IPB’s ability to meet its obligations in the face of adverse market conditions or a deposits run (42% of total IPB’s deposits are retail in nature).

The rating is also constrained by the bank’s low profitability in 1Q 2015, less-than-adequate, although improving, provisioning and collateral arrangements with corporate loans accounting for more than 95% of total loans and elevated currency risk (more than 42% of assets and 50% of liabilities are foreign currency denominated).