OREANDA-NEWS. April 04, 2016. RusRating has assigned a credit rating to RIABANK (AO) (Moscow). The rating is "CCC" on the international scale and "B" on the national scale, in both cases with a stable outlook.

The rating is based on a transparent ownership structure, a good quality securities portfolio, and moderate realized credit risks.

Constraining factors include negative trends in key financial indicators, loss-making operations under pressure from funding costs and expenditures on reserve formation, and high risk sensitivity.

About the Bank

RIABANK is a private-sector Moscow bank set up in 2003 that ranks among the top 400 in Russia by assets. Its principal beneficiaries are co-founders Oleg Boiko and Sergei Zemlyanski, who sit on the Board of Directors and each control a 47.15% interest, in part directly and in part via other corporate entities, including the insurance company STOLA. (STOLA’s license was withdrawn in February 2015 when it stated that it was no longer in that line of business, but the company met all existing obligations in full.) According to the Bank, its principal business is providing loans and other services to corporate clients, but securities have been the largest component of assets since the end of last year. RIABANK also issues guarantees to clients bidding for government contracts and has been actively developing retail deposits since mid-2015. Its service network consists of a head office and sub-branches in Moscow plus an operating office in Tver.

Capital is sufficient and of good quality; its stability is rated satisfactory. Retail balances and interbank loans (including Central Bank funds accessed under repo contracts) are the largest components of liabilities, while corporate client balances are trending downwards; risks to stability appear elevated. Asset quality is rated satisfactory, based on assessments of the securities portfolio and client loans, but the revenue-generating potential of the balance sheet is less than satisfactory. Current operations generate losses due to pressure from the cost of reserve formation and falling returns on core operations. Liquidity risks are moderate. Overall risk sensitivity is high.