Russia’s West Siberian Commercial Bank Outlook Stable

Standard & Poor’s Ratings Services said that it assigned its ‘B’ long-term and ‘C’ short-term counterparty credit ratings to Russian West Siberian Commercial Bank (WSCB). At the same time, the ‘ruA-‘ Russia national scale rating was assigned. The outlook is stable.

“The ratings reflect the bank’s weak capital, high credit risks emanating from the loan portfolio’s large single-party concentrations, a vulnerable funding profile, and relatively basic risk management,” said Standard & Poor’s credit analyst Eugene Tarzimanov.

These negative rating factors are somewhat offset by the bank’s strong financial performance, good level of reserving to absorb credit risk, relatively good distribution network and market position in Siberia’s Tyumen Oblast, and its adequate liquidity position.

“We expect WSCB to continue to operate in line with its strategic objectives, while diversifying its product range and client base,” said Mr. Tarzimanov. “This should lead to lower concentrations in the loan portfolio.”

We would consider raising the ratings on the bank if it materially improved its capitalization, decreased single-party lending concentration, and diversified its funding. The ratings could be lowered if the bank’s asset quality, financial performance, and capitalization deteriorate to a significant degree.