Moody’s Investors Service raised the long-term Deposit rating of Alfa-Bank in national currency, as well as the rating of senior unsecured debt in foreign and national currencies from “Ba2” to “Ba1”. Long-term rating of the Bank in foreign currency is confirmed at level “Ba2”, which is limited to the sovereign rating of Russia in foreign currency. The forecast on ratings – “stable”.
Review of the press service of Alfa-Bank:
The rating action is due to a reassessment of the level of state support, in connection with the amended Central Bank’s approach to systemically important banks, which now gives an extra notch to a baseline credit assessment Alfa-Bank and increases the overall rating by one notch. Underlying credit rating is confirmed at ba2, reflects the Agency’s view about the high indicators of the solvency and liquidity of Alfa-Bank. The Agency expects that the current business model of the Bank will remain stable, and the Bank will continue to demonstrate high profitability.
For the first half of 2017, the Agency notes the improvement in asset quality: the share of problem loans decreased to 9.2% from a peak of 12.7% at end-2015 due to the successful work of Bank with problem debts. Reducing the cost of risk and lower costs of funding allowed the Bank to significantly improve its profitability metrics – return on assets for 2016 amounted to 1.5% and reached 2.2% in annual terms in the first half of 2017. The Agency also notes the high level of capital adequacy and strong liquidity, supported by the constantly growing Deposit base and significant liquidity cushion – the share of liquid assets of Alfa-Bank makes up 28% of total assets.