OREANDA-NEWS. July 13, 2015.

RusRating has assigned a credit rating to PAO O.K. Bank (Yaroslavl). The rating is "BB" on the national scale, with a stable outlook.

The rating is based on the business ties of the Bank’s owners, which provide scope for active development, plus low realised credit risks.

Constraining factors include insufficient transparency about the Bank’s business model and its owners’ financial resources; low capital adequacy; weakly-diversified assets and funding; and minimal backing for both loans and guarantees.

About the Bank

PAO Obyedinenny Kommercheski Bank [trs. United Commercial Bank Public JSC] is a private-sector regional bank that ranks among Russia’s top 300 by assets, with a head office in Yaroslavl and branches in Moscow and Dzerzhinsk (N. Novgorod region). The Bank is owned by a group of private individuals, none whom controls a blocking stake. Business activity centres on Moscow region, with an emphasis on services for SME’s and guarantees issued in connection with competitions for government contracts. The funding base draws mainly on retail deposits.

Capital adequacy is low against a background of highly-concentrated credit risks on the issue of guarantees; capital quality is judged healthy. External funding draws mainly on retail deposits, along with corporate client resources (in some cases accessed via repo contracts); stability is judged moderate. The quality of outstanding guarantees is rated satisfactory. Securities account for a high portion of the balance sheet and many have been transferred under repo contracts; overall asset quality is rated satisfactory, reflecting high exposure to large-scale credit risks and minimal loan backing. Profitability measures are healthy, with a significant role played by commissions linked to guarantees. Current liquidity is sufficient, but liquidity risk is high in the longer term. Overall risk sensitivity is elevated.