OREANDA-NEWS. RusRating has increased SDM-Bank’s credit rating from “A+” to “AA-” on the national scale and from “BB+” to “BBB-” on the international scale, in both cases with a stable outlook.

According to the agency, the rating increase reflects steady development coupled with stable and healthy financial results.

The rating itself is based on the presence of the EBRD as a capital investor; strong management; solid market positions in the Bank’s core line of business; and healthy asset quality, as well as broadly stable and satisfactory financial indicators.

Constraining factors include modestly diversified lines of business and a modest overall market share.

SDM-Bank is a mid-sized private-sector bank that is effectively controlled by its co-founder and Chairman of the Board of Directors A.Y. Landsman; the EBRD acquired a 15% stake in the spring of 2011. The Bank has an extensive client base and its business is to a significant extent focused on services for smaller and mid-sized companies, along with retail deposits. Most offices are located in the Moscow region and branch activity elsewhere centres mainly on SME loans. Securities market activity expanded in response to the recent crisis.

Capital is sufficient and of good quality. External funding is solid; risks associated with dependence on retail deposits and on-call resources are offset by the upward trend in both categories, where balances have been stable for many years. Asset quality is judged satisfactory given a healthy loan book and liquid securities portfolio coupled with noticeable exposure to market risks. Profitability measures are healthy. Risk exposure is elevated but the associated risk sensitivity is moderate. Liquidity is sufficient and on the basis of balance sheet figures liquidity risk is modest.