Bank FK Otkrytiye : S&P Affirms Otkritie Bank at ‘B+’

S&P Global Ratings has affirmed the long-term credit rating of Otkritie Bank at 'B+'. The Agency has also affirmed the Bank's short-term rating at 'B'.

The Agency's analysts noted that by mid-August Otkritie Bank has stabilised the outflow of client funds. According to the Bank's Managing Director Anatoliy Predtechensky, the bulk of repayments were of routine nature and have been secured by a sufficient liquidity cushion created in advance, which is demonstrated by the Bank's substantial over-compliance with liquidity ratios.

The Bank's quick ratio (H2) as of 1 August (as per the financial statements) has exceeded the prescribed level by 5 times reaching 74% (regulatory requirement: 15%). The current ratio (Н3) has been 3.5 times greater than the regulatory levels reaching 185.8% (regulatory requirement: no less than 50%). The short-term liquidity ratio (H26) has reached 97% (regulatory requirement: no less than 80%).

S&P has assessed the Bank's liquidity ratios as adequate and noted the absence of substantial debt obligations raised in the open market and due to mature in the next six months.

The Agency has also highlighted Otkritie Bank's significance for the Russian financial system due to its sizeable market share and role in the Russian banking sector. "Otkritie FC Bank is included in the list of 10 systemically important financial institutions by the Russian Central Bank. We therefore believe there is a "moderately high" probability of the Bank receiving extraordinary support from the government if necessary. As a result, we would expect the Bank to be able to obtain additional short-term support from the Bank of Russia in the event the outflow of funds increases; we also believe the Bank will have access to unsecured credit resources of the Bank of Russia," noted S&P analysts.

"The confirmation of our rating by S&P is a sign of the Bank's strong resistibility against the events taking place in the financial sector," said Anatoliy Predtechensky, Managing Director at Otkritie Bank. "We are talking about the ratings reform as well as the media attacks on large private banks. Creating an advance liquidity cushion has allowed Otkritie Bank to continue business as usual and service its customers all this time. We have sufficient resources not only to comply with all prescribed ratios but also to successfully develop our business further."