Bank Uralsib has released its consolidated financial statement under IFRS for January-March 2016. According to the disclosed data, during the reporting period the bank turned a profit of Rub 253.8 mln, while the result of the bank's performance in January-March 2015 was a Rub 3.94 bln loss.
Taking into account items that were reclassified or may be reclassified as profit or losses (in particular, this is the reserve for revaluation of securities available for sale), total income during the first three months came to Rub 343.6 mln against a total loss of Rub 3.20 bln in the year-earlier period.
Earlier in May international rating agency Moody's Investors Service upgraded Bank Uralsib's long-term local currency and foreign currency deposit ratings from Caa2 to Caa1, and affirmed the bank's short-term deposit ratings at Not Prime. The lending institution's BCA and adjusted BCA were raised from ca to caa2, and long-term CRA from Caa1(cr) to B3(cr) (short-term CRA was affirmed at Not Prime(cr)). The rating agency set a positive outlook for the bank's long-term deposit ratings.
The agency explained the upgrade of Bank Uralsib's BCA by the execution of first measures of its rehabilitation plan, which was approved in November 2015. At that time, entrepreneur Vladimir Kogan became the bank's new controlling shareholder (82%), and as part of its rehabilitation plan the bank received Rub 14 bln from the Deposit Insurance Agency (DIA) for a term of 6 years at 6% and Rub 67 bln at 0.51% for 10 years, Moody's noted. "The effect from the initial recognition of loans at fair value totaled Rub 51 bln and was recorded as income. Thus, the termination of the Rub 21 bln obligation under subordinated debt allowed the bank to cover losses from the writedown of non-core assets and goodwill, and also losses caused by the additional formation of loan impairment provisions," the bank said on its website and published the translation of a press release of international rating agency Moody's.
The rating agency assesses as moderate the odds of the bank gaining further support from the government via expansion of its bailout package. In the upshot, Bank Uralsib's deposit ratings include an additional notch compared to its BCA.
The positive outlook for Bank Uralsib's long-term deposit ratings reflects the agency's expectations that the bank will gradually restore its ability to generate capital when executing its new development strategy that suggests a focus on retail and corporate banking and making more efficient use of available banking infrastructure, Moody's specified.
