OREANDA-NEWS. RusRating has lowered its outlook on Rosbank (JSC )’s credit rating. The rating itself is unchanged at AAA/A+ (on the national and international scales respectively).

The negative outlook is due to signs of deteriorating quality in the corporate loan book and the risk of reputation issues following reports that Russian Federation law enforcement officials have levelled accusations against top executives, including the Management Chairman.

In RusRating’s view these allegations have no immediate implications for the Bank’s creditworthiness, which is sustained in large part by its position as a Societe Generale group subsidiary. Even so the precedent could affect its reputation within Russia and also raises questions about corporate governance, including the nature of interactions between top executives (the Russian management team) and the parent group.

The rating itself is based on membership in a major international finance group, a solid and leading presence in virtually all segments of the banking market at the national level, and a high degree of financial flexibility.

Country risk is a constraining factor.

Rosbank is Russia’s third-largest private-sector credit organisation (tenth including state-owned players) and a universal commercial bank in which the Societe Generale group holds a stake of more than 80%. Vladimir Potanin – a prominent Russian businessman, principal owner of the InterRos group and at one time Rosbank’s principal shareholder – retains a minority stake, as does state-owned VTB. Rosbank operates one of the country’s largest branch networks and is an established player in virtually all market segments at the national level. Rusfinansbank and DeltaCredit Bank are wholly-owned subsidiaries.

Capital is sufficient and its quality is rated favourably. The diversification and stability of external funding are likewise rated favourably and the role of InterRos group resources has declined noticeably. Asset quality appears satisfactory; client loans predominate. Earnings performance is healthy. Liquidity is judged sufficient. Risk sensitivity is moderate.