Moody's on May 23 upgraded certain ratings of PJSC Rosbank, reflecting the improvement in its profitability and asset quality metrics as well as its funding structure.
The agency raised the Russian bank's long-term bank deposit and senior unsecured debt ratings to Baa3 from Ba1, with stable outlooks, and its baseline credit assessment to "ba2" from "ba3". The short-term bank deposit ratings were lifted to Prime-3 from Not-Prime, while its adjusted baseline credit assessment was raised to "baa3" from "ba1".
Rosbank's long- and short-term counterparty risk ratings were upgraded to Baa2/Prime-2 from Baa3/Prime-3 and its long- and short-term counterparty risk assessments to Baa2(cr)/Prime-2(cr) from Baa3(cr)/Prime-3(cr).
The lender's improved profitability was driven by lower credit costs, better efficiency and reduced cost of funding, along with its stronger fee and commission income generation, Moody's noted, adding that it expects Rosbank's operating profitability to continue improving in the next 12 to 18 months.
The agency also expects a high probability of support from the company's majority shareholder, France's Société Générale SA.