February 22, 2006 | CBonds
|Fitch Ratings has today changed the Outlook on the Long-term ‘B’ rating of Russia's Bank Uralsib ("Uralsib") to Positive from Stable. The bank’s other ratings are affirmed at Short-term 'B', Individual 'D' and Support '4'.|
The change in the Outlook reflects recent improvements in efficiency and core profitability and a reduction in loan concentrations. In addition, Uralsib’s Long-term, Short-term and Individual ratings also take into account the bank’s nationwide franchise, which is sizeable for a Russian privately-owned bank, relatively high capital ratios, adequate liquidity and low levels of loan impairment to date.
However, core profitability, despite improvements, is still only moderate and related party exposures, albeit mainly to other financial service companies within the broader Uralsib Financial Corporation, are significant. Furthermore, a large, strategic stake in the equity of Russian oil company Lukoil can result in considerable volatility in the bank’s earnings and equity. At the same time, Fitch notes that Uralsib’s capital ratios could withstand a large reduction in the value of this stake and still remain reasonable.
Uralsib was formed as a result of the merger in October 2005 of five Russian banks, and analysis is based primarily on 9M05 management IFRS accounts for the merged entity. Continuation of positive performance, franchise and diversification trends, coupled with maintenance of relatively high capital ratios in light of the large Lukoil exposure, could lead to an upgrade of the bank’s Long-term rating.
At end-9M05, Uralsib was the second largest privately-owned Russian bank by assets (RUB225 billion or USD7.9bn) and the largest by equity (RUB38.1bn or USD1.3bn). Uralsib Financial Corporation, a large Russian group owning financial and non-financial assets, which in turn has two individual shareholders, holds an 89% stake in Uralsib. An approximately 8% stake in the bank is held by the government of the Bashkortostan Republic, the region of Russia where Ural-Siberian bank, the largest of Uralsib’s legal predecessors, was based.
Company: FC URALSIB
|Full company name||JSC Financial corporation Uralsib|
|Country of risk||Russia|
|Country of registration||Russia|