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Fitch Affirms And Withdraws CentroCredit Bank's Ratings

June 19, 2012 | Fitch Ratings

Fitch Ratings-London/Moscow-18 June 2012: Fitch Ratings has affirmed CentroCredit Bank's (CCB) ratings, including its Long-term Issuer Default Rating (IDR) at 'B-' with Stable Outlook. At the same time, the agency has withdrawn the ratings as the bank has chosen to stop participating in the rating process. Therefore, Fitch will no longer have sufficient information to maintain the ratings. Accordingly, the agency will no longer provide ratings or analytical coverage of CCB. A full list of ratings actions is at the end of this comment.

The affirmation reflects the insignificant changes in the bank's risk profile recently, which Fitch anticipates is unlikely to change materially in the foreseeable future. CCB's ratings are constrained by its limited franchise and focus on securities trading business, which drives most assets and liabilities. As a result there is a material albeit so far reasonably managed exposure to market and liquidity risks.

The ratings also reflect the bank's comfortable capitalisation, which is sufficient to completely write off the bank's loan book and even absorb sizable losses from trading activities. Profitability is currently solid (3.8% return on average assets in 2011 according to management accounts), but highly dependent on the performance of the capital market. However, the agency is concerned about the high provisioning rate (above 50% of end-2011 gross loans), which in Fitch's view may be excessive, giving rise to regulatory risks.

CCB is a small Moscow-based bank focusing on proprietary trading. It is reportedly owned by the bank's current president, who is actively involved in its day-to-day management.

The rating actions are as follows:

Long-Term Foreign Currency IDR: affirmed at 'B-'; Outlook Stable; withdrawn
Short-Term Foreign Currency IDR: affirmed at 'B'; National Long-Term Rating: affirmed at 'BB(rus)'; Outlook Stable; withdrawn
Viability Rating: affirmed at 'b-'; withdrawn
Support Rating: affirmed at '5'; withdrawn
Support Rating Floor: affirmed at 'NF'; withdrawn.

Company: CentroCredit Bank

Full company nameThe CentroCredit Joint Stock Commercial Bank
Country of riskRussia
Country of registrationRussia
IndustryBanks

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