OREANDA-NEWS. RusRating has lowered the credit rating of AO AKB Express-Volga from "BB" to “CCC” on the international scale and from "BBB+" to “B-“ on the national scale, in both cases with a stable outlook.

According to the agency, the rating cut reflects increased regulatory and reputation risks affecting the parent ProbusinessBank and a substantial rise in credit risks following a large volume of asset-side transactions with that same bank.

The rating is based on moderately well-developed market positions at the regional level and healthy interest returns on client loans.

Constraining factors include high credit risks; high regulatory and reputation risks; and the limited diversification of both assets and liabilities by instrument type.

About the Bank

Express-Volga is a private-sector regional bank that ranks among the top one hundred in Russia by assets. The largest local player in Saratov region, it is a member of the LIFE group headed by Moscow-based ProbusinessBank, one of Russia's top one hundred credit organisations; the group has loan offices and other service locations in several regions of the country and includes six subsidiary banks plus Life Factoring and the real estate developer Probusiness-Development. Express-Volga’s own operations focus on loans and other services for small and mid-sized businesses plus retail clients, mainly in its home region. Market positions at the regional level are moderately well developed. The Bank is not active in the speculative markets.

Capital is sufficient and of good quality. External funding has been solid in the past and draws mainly on retail balances. Most assets take the form of client loans or highly-liquid instruments; overall asset quality is rated satisfactory based on analysis of these categories. Earnings performance is weak. Overall risk sensitivity is moderate but trending upward. Liquidity is sufficient.