10.02.2016, 23:59
M2M Private Bank's Credit Rating Lowered
OREANDA-NEWS. National Rating Agency has lowered its credit rating on M2M Private Bank PJSC to 'A-'. The outlook for the rating is Stable. The bank was assigned NRA's first-time individual credit rating of 'A' in August 2010. The latest rating action on the bank (the credit rating affirmation at 'A') dates Feb. 4, 2015.
The credit rating downgrade reflects factors, such as the bank's rising past-due loans (RUB 1.9 bn, or 11.9% of total loans). In addition, the collateral-to-customer loans ratio was not high enough (99%, net of collateralized guarantees) as of Jan. 1, 2016. NRA also notes the persistently high level of loans falling into the IV-V risk categories (25% as of Jan. 1, 2016).
M2M Private Bank managed to get out of the red and post RUB 459 million in profit for 2015. NRA notes, however, that this was achieved both through a reserve release and, largely, due to interest accrued but not received. NRA also notes the bank's historical reliance on large retail deposits, often FX-denominated, as well as the single-name concentration of its loan book.
Rating strengths include the bank's strong liquidity position (all liquidity ratios are well above the regulatory minima, and the bank's trading portfolio is comprised of debt instruments included in the Central Bank's Lombard List) and its comfortable capitalization level. The capital adequacy ratio does not prevent M2M Private Bank from expanding its lending operations.
The credit rating downgrade reflects factors, such as the bank's rising past-due loans (RUB 1.9 bn, or 11.9% of total loans). In addition, the collateral-to-customer loans ratio was not high enough (99%, net of collateralized guarantees) as of Jan. 1, 2016. NRA also notes the persistently high level of loans falling into the IV-V risk categories (25% as of Jan. 1, 2016).
M2M Private Bank managed to get out of the red and post RUB 459 million in profit for 2015. NRA notes, however, that this was achieved both through a reserve release and, largely, due to interest accrued but not received. NRA also notes the bank's historical reliance on large retail deposits, often FX-denominated, as well as the single-name concentration of its loan book.
Rating strengths include the bank's strong liquidity position (all liquidity ratios are well above the regulatory minima, and the bank's trading portfolio is comprised of debt instruments included in the Central Bank's Lombard List) and its comfortable capitalization level. The capital adequacy ratio does not prevent M2M Private Bank from expanding its lending operations.
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