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Fitch affirmed SDM-BANK Long-term foreign currency IDRs at ‘B-’ and revised its Outlook to Stable from Negative.

20.11.2009

November 20, 2009
Fitch affirmed SDM-BANK Long-term foreign currency IDRs at ‘B-’ and revised its Outlook to Stable from Negative.

November 20, 2009 Fitch Ratings took a number of rating actions on eight Russian banks.
As part of this action, Fitch affirmed SDM-BANK Long-term foreign currency IDRs at ‘B-’ and revised its Outlook to Stable from Negative.
The affirmation of SDM’s ratings and the revision of its Outlook to Stable from Negative reflect the bank’s satisfactory asset quality at end-Q309, with reported NPLs and rolled-over loans accounting for 3.6% and 4.7% of gross loans, respectively. Loss absorption capacity was reasonable relative to the level of loan impairment and is further supported by still strong income generation at the pre-provision level. Fitch estimates that at end-October 2009, SDM could have increased its regulatory reserves to 18% of gross loans from the current level of 6% without breaching regulatory capital requirements. SDM’s liquidity position is comfortable with liquid assets up to 30 days covering 40% of customer funding at end-Q309 and insignificant wholesale refinancing needs in the next 12 months. However, the bank’s ratings continue to be constrained by its small size, significant concentrations on both sides of the balance sheet and its sizable exposure to the real estate sector.

 

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