OREANDA-NEWS. National Rating Agency has affirmed its 'BBB' national scale credit rating onLLC CB “EL BANK” (EL BANK). The outlook is negative. The ‘BBB’ credit rating was assigned to the bank on Apr. 25, 2013 and affirmed with a negative outlook on Dec. 22, 2014.

The rating is supported by EL BANK’s well-collaterized loan book (the loans are more than 120% secured with a diversified collateral portfolio); consistently high loan quality with 80% of loans falling into the 1 and 2 risk categories and renegotiated/ restructured loans representing around 9% of the total; and the bank’s equity growth (due, partially, to the last year’s charter capital increase). The rating also recognizes EL BANK’s transparent ownership structure  and rising net interest margin, which reflects the substitution of the December 2014 intake of “costly” deposits with cheaper funds.

EL BANK’s historical reliance on confidence-sensitive retail deposits (which represent more than 76% of total liabilities), coupled with the low N3 ratio (52.12% as of June 1, 2015 and 51.42% as of July 1, 2015 compared with the regulatory minimum of 50%), low balances on its correspondent accounts with the Bank of Russia and other banks, unfavourable non-performing loan trends and rising NPLs-to-total-loans ratio are viewed as risks weighing on the bank’s credit profile.

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