OREANDA-NEWS. RusRating revises credit rating of GE Money Bank, which is now equivalent to Sovcombank's rating: “AA-” on the national scale and “BBB-” on the international scale, in both cases with a stable outlook.

Following the sale of a 100% stake in GE Money Bank to Sovcombank and in the light of integration plans GE Money Bank's credit rating has been set at the same level as Sovcombank's own rating: “AA-” on the national scale and “BBB-” on the international scale, in both cases with a stable outlook.

The rating is based on the credit rating of the parent bank and minimal operating risks associated with the integration process thanks to Sovcombank's prior experience in this area.

GE Money Bank is a mid-sized (by assets) private-sector bank that in February 2014 was sold to Sovcombank by GE Capital, a General Electric subsidiary. It specialises in consumer loans and up until the start of the recent crisis saw dynamic growth. The bank has a moderately dense and geographically diverse distribution network. Its business has been shaped by GE's experience, business ties and quality standards.

Capital adequacy is high and capital quality healthy. External funding is solid and its largest component is loans from the GE group. Assets centre on a retail loan book of satisfactory quality. Earnings performance is strong. Overall risk sensitivity is moderate. Liquidity reserves are high and risks to liquidity are minimal.

Sovcombank is a larger (by assets) private-sector bank and the largest credit organisation in the Kostroma region. In June 2012 the Netherlands-based holding company TBIF BV, representing the financial arm of the multi-profile Kardan Group, disposed of its capital stake; as a result the bank is now wholly-owned by its own top management in partnership with a Russian businessman. Retail services are its priority lines of business. Sovcombank has a reasonably wide service network that includes a presence in central Russia. As demand for personal loans contracted in response to the recent crisis it expanded its activity in the securities market, but this has since fallen back in response to renewed demand for credit products. Growth strategy is centred on retail services, including loans.

Capital is sufficient and its quality is rated favourably. External funding is dependent on retail deposits but its overall stability is likewise rated favourably in the light of past trends. Asset quality is judged satisfactory. Earnings performance is strong. Overall risk sensitivity is moderate. Liquidity is sufficient.