The change in outlook from “stable” to “positive” reflects healthy balance sheet measures of asset quality (including minimal credit risks despite current crisis conditions), higher capital adequacy measures, strong liquidity management and the general apparent stability of the Bank’s business.

Positive factors include the owners’ commitment to the Bank and substantial financial/political resources; healthy capital adequacy; solid market positions at the regional level; a stable circle of corporate clients; funding and liquidity independent of the interbank market; and minimal exposure to securities market risk. Potentially destabilising factors include heavy reliance on on-call corporate client resources, significant exposure to retail deposits, limited access to long-term liquidity and risks arising from dependence on non-financial resources.

About the Bank:

Sarov Business Bank (SBB) is a mid-sized (by assets) regional private-sector bank controlled by Chairman of the Board of Directors Vladimir Kirienko. The Bank operates mainly in the Nizhni Novgorod region and its business is focused on serving larger corporate clients, the retail market and SME loans. Within its home region SBB’s market positions are solid and its market share doubled following the 2008 take-over of Nizhegorodpromstroibank. The Bank works with some state-sector organisations and is well-connected politically at the regional level.