London, 15 December 2021 -- Moody's Investors Service ("Moody's") has today
affirmed long-term foreign currency bank deposit rating of Bank
Saint-Petersburg PJSC (Bank Saint-Petersburg) at Ba3,
the outlook on this rating remains stable. Concurrently,
Moody's affirmed Bank Saint-Petersburg's Baseline Credit
Assessment (BCA) and Adjusted BCA of ba3, the bank's long-term
local and foreign currency Counterparty Risk Ratings (CRR) of Ba2 and
its long-term Counterparty Risk Assessment (CR Assessment) of Ba2(cr).
The bank's Not Prime short-term foreign currency bank deposit rating,
Not Prime short-term local and foreign currency CRRs and Not Prime(cr)
short-term CR Assessment were also affirmed.
A full list of affected ratings can be found at the end of this press
release.
RATINGS RATIONALE
AFFIRMATION OF THE BCA AND DEPOSIT RATINGS
The affirmation of Bank Saint-Petersburg's BCA and deposit
ratings reflects the bank's good recurring profitability,
as well as its solid capital and liquidity buffers, that are counterbalanced
by the relatively high level of problem loans.
As of 30 September 2021, Bank Saint-Petersburg's ratio
of tangible common equity to risk-weighted assets was 13.7%,
and Moody's forecasts it to remain stable over the next 12-18
months, as retained earnings will be sufficient to match the risk-weighted
assets growth. Bank Saint-Petersburg's earning generation
is supported by its sustainable net interest margin and solid fee-and-commission
income. The revenue will be sufficient to absorb credit losses
which Moody's expects to hover around 1%-1.5%
of the bank's average gross loans in the next 12 to 18 months.
As of 30 September 2021, Bank Saint-Petersburg's problem
loans were 9.7% of its total gross loans, a relatively
high ratio compared to the global and local peers. The above being
said, as of the same reporting date, the coverage of problem
loans by loan loss reserves was good at 87%.
As of 30 September 2021, core customer funding accounted for 72%
of Bank Saint-Petersburg's total non-equity funding,
with the proportion of granular retail deposits at 58% of total
customer funding. Around half of all customer funds represent stable
and cheap current and settlement accounts. Bank Saint-Petersburg
maintains a robust liquidity buffer, with cash, cash equivalents,
dues from banks and unencumbered liquid securities consistently exceeding
20% of its total assets.
RATING OUTLOOK
The stable outlook on Bank Saint-Petersburg's long-term
foreign currency deposit rating reflects Moody's view that the bank's
sound pre-provision earnings and solid capital buffer will be outweighed
by its vulnerable asset quality and the still high provisioning charges.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A prerequisite for Bank Saint-Petersburg's rating upgrade
would be a sustained improvement in the bank's asset-quality
metrics. Bank Saint-Petersburg's BCA and foreign currency
deposit rating could be downgraded or the rating outlook could be changed
to negative from stable if the bank's asset quality and profitability
weaken to such an extent that credit losses start to erode its capital,
although this scenario is currently beyond Moody's base case expectations.
LIST OF AFFECTED RATINGS
..Issuer: Bank Saint-Petersburg PJSC
Affirmations:
....Adjusted Baseline Credit Assessment,
Affirmed ba3
....Baseline Credit Assessment, Affirmed
ba3
....Short-term Counterparty Risk Assessment,
Affirmed NP(cr)
....Long-term Counterparty Risk Assessment,
Affirmed Ba2(cr)
....Short-term Counterparty Risk Ratings,
Affirmed NP
....Long-term Counterparty Risk Ratings,
Affirmed Ba2
....Short-term Bank Deposit Rating,
Affirmed NP
....Long-term Bank Deposit Rating,
Affirmed Ba3, Outlook Remains Stable
Outlook Action:
....Outlook, Remains Stable
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Banks Methodology
published in July 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1269625.
Alternatively, please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and
sensitivity analysis, see the sections Methodology Assumptions and
Sensitivity to Assumptions in the disclosure form. Moody's
Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement
provides certain regulatory disclosures in relation to the provisional
rating assigned, and in relation to a definitive rating that may
be assigned subsequent to the final issuance of the debt, in each
case where the transaction structure and terms have not changed prior
to the assignment of the definitive rating in a manner that would have
affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
The ratings have been disclosed to the rated entity or its designated
agent(s) and issued with no amendment resulting from that disclosure.
These ratings are solicited. Please refer to Moody's Policy
for Designating and Assigning Unsolicited Credit Ratings available on
its website www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's general principles for assessing environmental, social
and governance (ESG) risks in our credit analysis can be found at http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1288235.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the EU and is endorsed
by Moody's Deutschland GmbH, An der Welle 5, Frankfurt
am Main 60322, Germany, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that issued the credit rating is available on www.moodys.com.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Olga Ulyanova
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service Limited, Russian Branch
7th floor, Four Winds Plaza
21 1st Tverskaya-Yamskaya St.
Moscow 125047
Russia
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
Yaroslav Sovgyra, CFA
Associate Managing Director
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
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United Kingdom
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
