On 9 August, international rating agencies upgraded the ratings of Center-Invest Bank, southern Russia’s largest bank (Rostov-on-Don). Moody’s Investors Service upgraded the bank’s long-term local currency debt rating and foreign currency deposits ratings from B1 to Ba3. At the same time, Moody’s Interfax Rating Agency upgraded the long-term National Scale Rating of Center-Invest Bank to Aa3.ru from A2.ru (strong creditworthiness relative to other domestic issuers).
The upgrade of Center-Invest’s ratings is based on the bank’s financial statements for 2010 and H1 2011, prepared under IFRS.
The upgrading of the creditworthiness rating underscores the high degree of independent financial sustainability demonstrated by Center-Invest Bank, the only bank in southern Russia to have had an international rating for the last five years.
The Ba3 rating from Moody’s Investors Service is considered broadly equivalent to the ВВ- ratings of Fitch IBCA and Standard and Poor’s. The rating assigned to Center-Invest Bank corresponds to the international ratings for the Rostov region.
"The upgrade of CIB’s ratings reflects a positive track record of operations amid the global financial crisis, which highlights the sustainability of the bank’s business model and demonstrates its resilience to the challenging operating environment," says Semyon Isakov, a Moody’s Assistant Vice-President and lead analyst for the bank. “Other factors underpinning the ratings include the bank’s solid capital cushion, its improving profitability, and its adequate corporate governance and risk management procedures. The low level of related-party lending also positions the bank favourably among its peers.’
Moody’s experts point out that the current rating reflects Center-Invest Bank’s strong market positions in Russia’s Southern Federal District. Notably, the bank is the largest SME lender in the region, demonstrating international best practice and loan portfolio diversification in line with international standards.
“The upgrading of Center-Invest Bank’s rating, amid the volatility on the global markets resulting from the downgrading of the rating for the world’s largest economy, is significant for the banking community as a whole, and for residents and business owners in southern Russia,” says Dr. Vasily Vysokov, President and Chairman of the Board of Center-Invest Bank. Firstly, it is further recognition of our work to introduce a sustainable banking business model. Secondly, the presence in the region of a bank with an international investment rating sets a good example for local companies and gives an important signal to investors.”
As at 01.07.2011, Center-Invest Bank’s assets, calculated under IFRS, were RUR49.9bn, profits were RUR0.5bn, and deposits totalled RUR33.8bn. The bank’s loan portfolio grew by 18% in the first 7 months of 2011, to RUR40.2bn at 1 August.