ACRA has upgraded MKB’s credit rating to A+(RU)
On 22 November 2021, ACRA upgraded MKB's credit rating to A+(RU), stable outlook.
The positive rating action reflects an improvement in the bank’s risk profile caused by re-assessment of the market risk taken. The analysts also note the continuing steady growth of the bank's capitalisation, which enhances its capacity to cover potential credit and market risks. ACRA has affirmed a strong capital adequacy evaluation, solid evaluations of the business profile, funding, and liquidity. The agency also appreciated that the bank's performance has been stable over the last 18 months, despite the increased risks in the operating environment.
The analysts welcome the inclusion of ESG principles in the strategic development priorities, which they believe is going to strengthen MKB's investment case. Furthermore, the analysts note that one of the bank's strengths is the relationships with prime largest corporates, which facilitates its involvement in promising and important projects.
MKB improves consistently its capitalisation by means of both stable profit generation and external injections. It raised RUB 23 bln through an SPO in May 2021, and USD 350 mln by issuing perpetual subordinated debt in October 2021. This reflects high appetite for the bank from investors and strong support by the shareholder.
The Bank's risk profile has been showing a positive trend in terms of the share of potentially problem loans in the last 24 months. Its focus on big customers has become one of its competitive advantages and helped it handle the 2020 crisis with relatively low credit losses: its CoR as at end-2020 was 1.8% (1% for the corporate portfolio). In 1H2021, the Bank charged CoR at 0.6% (in annualised terms)
In terms of funding and liquidity, the agency's analysts highlight a stable deposit base and a comfortable liquidity position.