International rating agency Standard & Poor's has affirmed its long-term and short-term counterparty credit ratings of B/B on Kraiinvestbank. The outlook for the ratings is negative. In addition, the lender's national scale rating was affirmed at ruBBB+.
The agency affirmed Kraiinvestbank's ratings as it expects the bank to reduce real estate investments, and the Krasnodar region's government would ensure that injections into the bank's capital are made in 2016. The agency thinks that these measures are key to stabilize the bank's business profile and financial profile during the period when economic and sectoral risks in Russia remain elevated, S&P said in a press release.
The negative rating outlook reflects difficulties that Kraiinvestbank has encountered due to deteriorating operating conditions in Russia and that put pressure on its capitalization indicators and the asset quality, the S&P credit ratings service noted.
The agency warned that it could downgrade the bank's rating if the regional government takes no step to inject funds into the bank until the end of 2015 as it thinks that the lender's capitalization indicators would continue to fall throughout the year. The bank's ratings could be upgraded or the rating outlook could be revised only if operating conditions in Russia stabilize, S&P noted.