Press Releases / 14.05.2015

Press Release as of 14.05.2015


AK&M Rating Agency affirmed the national scale credit rating of RUSSLAVBANK (license no. 1073) at 'A', tier 3, with a stable outlook.

The 'A' rating indicates that RUSSLAVBANK is a highly creditworthy borrower. The risk of a failure to meet obligations in time is low, the full or partial debt restructuring risk is minimal.

RUSSLAVBANK is a mid-sized Russian credit institution in terms of the amount of business. Headquartered in Moscow, the Bank operates a branch network including 1 branch, 3 satellite offices, 10 loan desks and 4 operational offices. The bank provides all types of banking products and services involving Russian rubles and foreign currencies and effects securities transactions. RUSSLAVBANK is in the 100-200 range among Russian banks in terms of assets and equity capital.

The credit rating is essentially supported by the growing key balance sheet metrics, the acceptable structure of assets and liabilities, the solid retail funding base, and the strong liquidity position.

The Bank's assets and liabilities are comfortably structured and improving. In Q1 2015, they increased by ca. 6%. The growth was mostly attributable to the Central Bank of Russia's deposits reaching RUB 10.6 billion on April 1, 2015 (32% of the Bank's borrowings). This, in our view, is an evidence of the regulatory authority's complementary position and indirectly contributes to the credit institution's rating.

Another positive rating driver is the steady and growing private deposits, a key source of funding for the Bank. As of the last reporting date (April 1, 2015), private deposits reached the highest level in the period under review (RUB 16.4 billion, increasing by 18.5% since the start of 2014, which is commensurate with the average growth rate), without a marked speculative deposit inflow. In the first quarter of 2015, the Bank's current borrowings from individuals increased more than 1.5 times, time deposits increasing by 3.6% (against the average percentage 5.9% in Russia's banking sector). These achievements indicate the Bank's ability to maintain customer confidence in the retail business segment.

The Bank's asset growth was driven by higher investments in securities (accounting for 37% of its total assets). It should be noted that the Bank's portfolio is entirely composed of the bonds on the Central Bank of Russia's Lombard List. Net loans receivable are still the main source of assets (42.5%). Therefore, almost 80% of the Bank's total assets are attributable to its key earning components.

We also appreciate RUSSLAVBANK's fairly comfortable liquidity position: the share of highly liquid assets (immediately available funds) in total assets of the credit institution is 9.6%, which is generally commensurate with the average level in Russia's banking sector. The Bank maintains its acid test and current liquidity ratios (N2 and N3) far above the minimum acceptable levels (15% and 50%).

At the same time, the Bank's rating is constrained by the unimpressive loan book quality and the shrinking net earnings.

RUSSLAVBANK's loan portfolio is quite imperfect, with a substantial percentage of loan arrears. As of April 1, 2015, problem and hopeless loans accounted for an uncomfortable 19.4% of the loan portfolio. 9.4% of the loans receivable are in arrears, more than twice the average level in Russia's banking sector, which poses a moderate risk.

The Bank's rating is also constrained by the across-the-board reduction in total net incomes by 42.1% in the first quarter of 2015 resulting from the previous year's transformation at the Bank and its market surroundings. In particular, the disposal of some of its loan portfolio and the CONTACT cash transfer system reduced the Bank's net interest and commission incomes that have not since been able to come back to the Q1 2014 level.

Full Bank name: Commercial Bank Russky Slaviansky Bank Closed Joint-Stock Company


RUSSLAVBANK has been operating in the market of banking services since 1990. The Bank of Russia assigned it registration number 1073 as of December 5, 1990. The Bank has a general banking license as of April 28, 2012, and a license for accepting deposits and placement of precious metals as of January 5, 2003. The Bank has been a member of Russia's deposit insurance system since November 11, 2005, DIS registration no. 418.


This press release is based on the Statement of assignment of a credit rating to RUSSLAVBANK and the Credit Rating Methodology for Banks and their Debt Instruments..

The rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Bank's creditworthiness and shall not be construed as a recommendation to purchase or sell securities, or to lend funds.

AK&M Rating Agency shall not be held liable for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.

AK&M Rating Agency is a leading independent national rating agency engaged in rating activities since 1993. CJSC AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010) and is on the Central Bank of Russia's Register of Accredited Rating Agencies.


AK&M Rating Agency

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Phone: (495 916-70-30,

Fax: (499 132-69-18.