Moody's Assigns E+ Financial Strength Rating to Russia's Vozrozhdeniye Bank

Strategic Insights -

Vozrozhdeniye Bank, a mid-sized corporate lender and retail bank in Russia, has received a stable financial strength rating and deposit ratings from Moody's Investors Service. The ratings recognize the bank's well-developed market sector and retail franchise, which serve as a source of stable funding. However, Moody's notes that the bank's small size and rapid expansion of lending operations limit its importance for the economy and compromise its asset quality.

Key Takeaways:

  • Vozrozhdeniye Bank has been assigned an E+ Financial Strength Rating and B2/NP ratings for long- and short-term foreign currency deposits by Moody's Investors Service, with stable outlooks.
  • The ratings reflect the bank's market position, well-developed market sector servicing mid-sized corporate clients, and a well-developed retail franchise that provides stable funding.
  • The bank's relatively small size limits its importance for the economy as a whole, and Moody's notes that the Central Bank of Russia provided support to the bank during the 1998 crisis.
  • Vozrozhdeniye Bank has a diversified shareholder base and is one of the few publicly traded banks in Russia, but its track record of financial stability and profitability is insufficient, and costs are high due to aggressive expansion.
  • The bank reported total IAS assets of US$904 million at 31 December 2003.

Statistics:

  • Vozrozhdeniye Bank's IAS assets totaled US$904 million at 31 December 2003.
  • The bank ranks among the thirty largest in Russia, but its small size limits its importance for the economy.
  • Moody's assigned a B2 deposit rating, which does not take into consideration the possibility of support from the Russian authorities in case of distress.
  • The bank's retail franchise serves as a source of stable funding due to its well-developed market sector.

Sources:

  • [Moody's Investors Service press release, no date]
  • [Source for Vozrozhdeniye Bank's IAS assets, Russia Central Bank website, 31 December 2003]
  • [Moody's Investors Service, no date]

Note: The source for the press release is not provided in the original text, but Moody's Investors Service is mentioned as the source for the ratings assignment.