Moody's assigns B2/NP/E+ ratings to Minsk Transit Bank (Belarus)
November 27, 2008
Moscow, November 27, 2008 -- Moody's Investors Service has assigned B2
long-term and Not Prime short-term local and foreign currency deposit
ratings and an E+ bank financial strength rating (BFSR) to Minsk Transit
Bank (MTB). The outlook on all ratings is stable.
According to Moody's, the ratings reflect the good diversification of the
bank's loan book, its adequate liquidity position and its high capital
adequacy, which significantly underpins the bank's further growth prospects.
At the same time, the bank's ratings are constrained by its small size with
an underdeveloped franchise, its unseasoned retail loan portfolio resulting
from its rapid loan growth in 2007-2008 and its weak corporate governance
Moody's notes that MTB is highly active in the retail and corporate auto
loan segment, which correlates with the business of its major shareholder.
Potential pressures in this market segment -- which have already
materialised in all major auto markets worldwide -- could thus not only
weigh on the bank's asset quality but also constrain its major shareholder's
revenues, with amplified effects for both.
If MTB were to succeed in effecting a significant but manageable increase in
the scale of its operations at the same time as building a franchise that
could be considered as more independent from its owners, this could result
in upward rating pressure provided the bank's financial metrics remain
strong. Conversely, downward rating pressure could arise from a significant
weakening of the bank's liquidity position, a material deterioration in its
asset quality or a significant increase in concentrations in its loan book.
However, a downgrade of the bank's BFSR of E+ is unlikely in the near term.
Headquartered in Minsk, Belarus, MTB reported total 2007 IFRS assets of
US$150 million, total equity of US$42 million and net income of US$3.8
million. In the first nine months of 2008, MTB's total unaudited local GAAP
assets increased 24% to US$186 million.
Company — MTBank
Full nameMTBank CJSC