14 May 2004 08:47
S&P REVISES OUTLOOK ON IIB TO POSITIVE
PARIS. May 14 (Interfax) - Standard & Poor's Ratings Services has revised its outlook on Russia-based
International Industrial Bank (IIB) to positive from stable, the agency said in a press release Friday. At the same
time, the 'B-' long-term and 'C' short-term counterparty credit ratings on IIB were affirmed.
"IIB's growth prospects are good, thanks to its improved capital position and shareholders'
commitment," said Standard & Poor's credit analyst Ekaterina Trofimova.
In fourth-quarter 2003, IIB's owners injected additional capital into the bank, bringing IIB's equity to 26
billion rubles and its equity- to-assets ratio to a high 47% at December 31, 2003. This is offset, however, by the
bank's still high concentrations of large single-party lending and funding exposures, and its dependence on the
continued favorable business and political standing of its owners.
With 55.5 billion rubles ($1.9 billion) in assets at year-end 2003, IIB is one of Russia's 10 largest banks. It
is primarily a corporate bank, with a relatively light cost structure, and its return on revenues is among the highest
in Russia. As at most other large private banks in Russia, individuals with outside interests in other industries
indirectly own IIB. The main shareholders and founders of IIB maintain close alliances with regional governments and
with some large domestic oil and coal groups. These contacts are still an important factor in attracting business to the
bank.
IIB's future creditworthiness will depend on a continued strong financial profile and a deepening of its
franchise that would not be linked to its owners' political connections and knowledge of state sector. The ratings
on the bank are also contingent on developments in the Russian economy, including the pace and substance of ongoing
legal and regulatory reforms.
"The ratings on IIB could be raised if the bank broadens its client base and consequently diversifies risks
while maintaining its good financial profile," added Trofimova.
[Interfax] |
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