The credit rating of JSC «REALIST BANK» (former «BaikalInvestBank» JSC; hereinafter, REALIST BANK, or the Bank) reflects the Bank's weak business profile, strong capital adequacy, neutral risk profile assessment, and satisfactory liquidity and funding assessment. Previously, the Bank's credit rating status was set to "Rating under revision: Negative" because the Bank's key ultimate owners and one of the members of its board of directors were arrested in a criminal case. The "Negative" credit rating outlook reflects the risks of a decrease in the Bank's creditworthiness, taking into account the uncertainty of the outcome of the criminal case.
Key rating assessment factors
The Bank's capital adequacy ratios are high. As of December 1, 2020, N1.2 ratio was 14.9%. The quality and concentration of the Bank's loan portfolio are satisfactory, and NPL 90+ amounted to 6.8% as of December 01, 2020. At the same time, the share of the loan portfolio attributable to the top ten groups of borrowers is about 30%. Capital adequacy and risk profile assessments have remained unchanged.
The detention of the key owners and a member of the board of directors of the Bank led to an outflow of customer funds, which was offset by a cash injection from Bureaucrat LLC, which directly controls 100% of the Bank. This made it possible to maintain the regulatory liquidity metrics at sufficiently high levels; on the other hand, it led to a significant increase in the resource base concentration. As a result, the funding assessment has been downgraded to weak, while the liquidity and funding indicator has remained satisfactory.
Key assumptions
- Sticking to the Bank's current strategy and business model in the next 12–18 months;
- Retaining the Bank's core client base in terms of active and passive transactions;
- Maintaining the capital adequacy ratio (N1.2) not lower than 12% in the next 12–18 months;
- Maintaining the loan portfolio's quality and concentration metrics at current levels.
Potential outlook or rating change factors
The Negative outlook assumes that the credit rating may be downgraded within the 12 to 18-month horizon.
A positive rating action may be prompted by:
- Significant decrease in NPL 90+ and/or loan portfolio concentration.
A negative rating action may be prompted by:
- Loss of a significant share of core client base in terms of active and passive transactions;
- Decrease in capital adequacy ratios and liquidity indicators;
- Significant increase in non-performing loans or other problem and potentially problem exposures.
Rating components
Standalone creditworthiness assessment (SCA): b.
Adjustments: none.
Support: none.
Issue ratings
No outstanding issues have been rated.
Regulatory disclosure
The credit rating has been assigned under the national scale for the Russian Federation based on the Methodology for Credit Ratings Assignment to Banks and Bank Groups Under the National Scale for the Russian Federation, and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating of JSC «REALIST BANK» was published by ACRA for the first time on November 30, 2017. The credit rating and its outlook are expected to be revised within one year following the publication date of this press release.
The assigned credit rating is based on the data provided by JSC «REALIST BANK», information from publicly available sources, as well as ACRA’s own databases. The rating analysis was performed using IFRS financial statements of JSC «REALIST BANK» and statements of JSC «REALIST BANK» composed in compliance with the Bank of Russia's Ordinance No. 4927-U dated October 8, 2018. The credit rating is solicited, and JSC «REALIST BANK» participated in its assignment.
No material discrepancies between the provided data and the data officially disclosed by JSC «REALIST BANK» in its financial statements have been discovered.
ACRA provided no additional services to JSC «REALIST BANK». No conflicts of interest were discovered in the course of credit rating assignment.