S&P Global Ratings Upgraded Alfa-Bank’s Outlook to Stable

On June 01, 2016, S&P Global Ratings revised the outlook on JSC Alfa-Bank to stable from negative and affirmed ’BB/B’ long- and short-term counterparty credit ratings. Alfa-Bank’s rating is one of the highest in the Russian banking sector.

The stable outlook reflects S&P view that the group’s financial profile will remain resilient to the economic slowdown in Russia. The agency mentioned that JSC Alfa-Bank demonstrated good internal capital generation. In 2015 the group demonstrated a financial good performance with net income of $480 million. S&P commented that the bank’s profitability metrics were historically better than privately owned domestic peers.

Alexey Marey, CEO, commented: «Credit ratings and outlook is important for investors who buy bonds and Eurobonds of Alfa-Bank. It is also important to cooperate with international counterparties and major Russian companies, which placed funds in Alfa-Bank.
Nevertheless, private customers and small business received another important confirmation of Alfa-Bank’s reliability. The sound strategy; our efforts in customer relations, in the constant team development and technology platform provided the bank’s leadership in the Russian banking system.»

Alexey Tchoukhlov, First Deputy Chairman and CFO, commented: «In March 2014 the agency assigned a „negative“ outlook to the sovereign rating of Russia and as a consequence — the largest Russian companies and banks. Alfa-Bank’s financial results over the past two years convinced the experts that our business model was stable and the bank had steadily development.»

The rating actions reflect S&P view of Alfa-Bank’s leading competitive position among private sector banks in Russia in terms of assets, product lines, efficiency, and comprehensive approach to its clients. The agency notes positively the bank’s efficient risk-management framework and successful recovery of problem loans. It is important that Alfa-Bank is in the CBR list of systemically important banks. However, the ratings on the bank currently do not incorporate any government support due to the bank’s relative level of the stand-alone credit profile is one notch below sovereign ratings.