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

According to the agency, the rating increase reflects growing market positions and an effective strategy built around regional economic development, coupled with an improved profit structure and steady financial indicators.

The rating itself is based on a stable corporate client base, strong support from the Bank's owner, professional management, and an important social function in the Krasnodar region.

Constraining factors include dependence on retail deposits; high exposure to large-scale credit risks and borrowers in a particular industry; and a business concentrated on a single region.

Kuban Credit is a larger regional bank that operates in the Krasnodar region and is one of the top one hundred banks in Russia by assets. The Bank is owned by businessman V.K. Budarin and its core line of business is the provision of corporate loans, some of which are extended to affiliated companies. Retail activity has been developing since 2001, with an emphasis on deposits, payments and plastic cards; a mortgage loan programme was launched in 2005. The Bank has a well-established network of sub-branches in its home region and is a leading player in all main segments of the local market.

Capital adequacy is healthy and capital quality is rated favourably, but a large portion of the Bank's own funds are immobilised. Retail deposits are the main component of liabilities; their stability is reinforced by an expanding market presence and important social function in the Krasnodar region. Asset quality is rated satisfactory based on analysis of client loans, which involve exposure to large-scale credit risks and affiliated parties in the construction industry; loan backing is acceptable and interest returns are healthy. Returns on core operations are healthy. Overall risk sensitivity is moderate. Liquidity is sufficient.