Moody’s changes AK BARS Bank’s rating outlook to stable

On 12 May, 2017 Moody’s Investors Service changed the outlook on AK BARS Bank’s long-term deposit and senior unsecured debt ratings to stable from negative and affirmed the long-term local and foreign-currency deposit rating at B2, and foreign senior unsecured debt rating at B2.

Chairman of AK BARS Bank Zufar Garaev noted: «The result is based on the Bank’s performance indicators stated within consolidated audited IFRS financial statements for 2016. The improved quality of loan portfolio, growth of net interest margin, as well as anticipated capital injection in the amount of RUB 10 bln. were the key factors contributing to Moody’s positive revision of the outlook. Moody’s mentions the Bank’s liquidity cushion in the amount of RUB 70 bln. and capital adequacy ratio according to Basel III at 14%.

The change in the forecast is considered as a possibility of the ratings upgrade in case of further positive dynamics which the Bank is striving to achieve within 2017».

Moody’s also takes into account a high likelihood of government support for AK BARS Bank from the Republic of Tatarstan. The Bank is the authorized financial institution of the Government of Tatarstan Republic and the largest bank with almost 40% of market share in the region.

Further change towards the Bank’s rating upgrade, according to Moody’s becomes possible in case of the improvement in the Bank’s standalone financial profile, including better asset quality, a sustainable trend of positive recurring profitability together with the maintenance of good capitalization.

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