TEXT-S&P summary: Gazprombank

Fri Dec 28, 2012 7:53am EST

Related Topics

(The following statement was released by the rating agency)

Dec 28 -

===============================================================================

Summary analysis -- Gazprombank ----------------------------------- 28-Dec-2012

===============================================================================

CREDIT RATING: BBB-/Stable/A-3 Country: Russia

Primary SIC: Commercial banks,

nec

===============================================================================

Credit Rating History:

Local currency Foreign currency

28-Aug-2012 BBB-/A-3 BBB-/A-3

11-Aug-2011 BB+/B BB+/B

01-Oct-2009 BB/B BB/B

13-Jan-2009 BB+/B BB+/B

===============================================================================

Ratings Score Snapshot

Issuer Credit Rating BBB-/Stable/A-3

SACP bb

Anchor bb

Business Position Adequate (0)

Capital and Earnings Moderate (0)

Risk Position Adequate (0)

Funding and Liquidity Average

and Adequate (0)

Support +2

GRE Support +2

Group Support 0

Sovereign Support 0

Additional Factors 0

Major Rating Factors

Strengths:

-- Strong market position in the domestic market.

-- A loan portfolio that benefits from low single-name concentration risks and adequate sector diversification.

-- High systemic importance in Russia and GRE status resulting in a high probability of government support.

Weaknesses:

-- High volatility of revenues related to equity investments and project finance activity.

-- Recently aggressive growth, which is, however, expected to slow slightly over the next two years.

Outlook

The stable outlook reflects Standard & Poor's Ratings Services' expectation that Russia-based Gazprombank's reduced risk profile, its good corporate franchise, and resilient financial profile will likely allow the bank to withstand the tougher global economic environment in 2013, including in Russia.

We would consider a negative rating action on Gazprombank if aggressive growth of the loan portfolio put pressure on the current level of capitalization. If the bank's projected risk-adjusted capital (RAC) ratio fell below 5%, we would revise our capital and earnings assessment to "weak" and lower the long-term rating on the bank. Any departure in strategy with respect to the reduction of market risks or increasing the share of volatile trading or other nonrecurring operations could also prompt a negative rating action. Substantial changes to the strategy, termination of the long-term agreement on strategic cooperation with OAO Gazprom (BBB/Stable/A-2), or other changes that would weaken Gazprombank's role for or link with the government, might also lead to a negative rating action.

Ratings upside is limited at this stage. It would require both a significant improvement in the bank's SACP, notably its capitalization, and revision of our Bank Industry Country Risk Assessment (BICRA) of Russia or the sovereign's creditworthiness. Such concurrent improvements are, in our view, unlikely in the next 12 months.

Related Criteria And Research

-- Banking Industry Country Risk Assessment: Russia, March 19, 2012

-- Banks: Rating Methodology And Assumptions, Nov. 9, 2011

-- Banking Industry Country Risk Assessment Methodology And Assumptions, Nov. 9, 2011

-- Group Rating Methodology And Assumptions, Nov. 9, 2011

-- Bank Hybrid Capital Methodology And Assumptions, Nov. 1, 2011

-- Rating Government-Related Entities: Methodology And Assumptions, Dec. 9, 2010

-- Bank Capital Methodology And Assumptions, Dec. 6, 2010

FILED UNDER: