ACRA has assigned the “Rating under review: developing” status to the credit ratings of “Bank Otkritie Financial Corporation” (PJSC) (hereinafter, Otkritie, or the Bank) and its bond issues to reflect the decision made by the board of directors of the Bank of Russia to sell a 100% stake in PJSC “Bank Otkritie Financial Corporation” (PJSC) to VTB Bank (PJSC) (AAA(RU), outlook Stable). According to the press release of the Bank of Russia, the title to the shares of “Bank Otkritie Financial Corporation” (PJSC) will be transferred to VTB Bank (PJSC) no later than December 31, 2022, provided that VTB Bank (PJSC) fulfils its obligations to pay in full.
Otkritie’s’ current credit rating — AA(RU — was based on the very high likelihood of extraordinary support from the current shareholder, if necessary, due to the Bank’s high systemic importance. Otkritie’s standalone creditworthiness assessment (SCA) reflected its strong business profile, adequate capital position, satisfactory risk profile, and adequate funding and liquidity assessment. Otkritie is currently the parent organization of a banking group that bears the same name and provides a wide range of financial services to the economy.
The “Rating under review: developing” status reflects the Agency’s need to receive and then perform additional analysis of information on the new owner’s strategic plans with regard to Otkritie, the conditions of the deal, as well as other significant information, in order to clarify the Bank’s SCA and credit rating.
potential outlook or rating change factors
The “Rating under review: developing” status indicates a variety of trends: the rating may stay unchanged, be upgraded, or be downgraded.
Removal of the “Rating under review: developing” status and affirming or upgrading the credit rating may be prompted by:
- Receipt of information to clarify the SCA and assess support at a level that is sufficient to affirm or upgrade the credit rating.
Removal of the “Rating under review: developing” status and downgrading the credit rating may be prompted by:
-
Lower assessment of support from the new owner;
-
Negative impact of the deal on the Bank’s creditworthiness.
rating components
SCA: а+.
Adjustments: none.
Support: the previously assigned rating took into account the high likelihood of extraordinary support being provided by the shareholder. In view of this support, the Bank’s credit rating was set at AA(RU).
issue ratings
“Bank Otkritie Financial Corporation” (PJSC), BO-P06 (RU000A101GR3), maturity date: February 25, 2025, issue volume: RUB 15 bln, — АА(RU).
“Bank Otkritie Financial Corporation” (PJSC), BO-P07 (RU000A102R73), maturity date: February 6, 2026, issue volume: RUB 15 bln — АА(RU).
“Bank Otkritie Financial Corporation” (PJSC), BO-P08 (RU000A1035Y6), maturity date: June 4, 2026, issue volume: RUB 10 bln — АА(RU).
“Bank Otkritie Financial Corporation” (PJSC), BO-P09 (RU000A103PT6), maturity date: September 19, 2024, issue volume: RUB 15 bln — АА(RU).
Rationale. The issues listed above are senior unsecured debt of Otkritie. Due to the absence of either structural or contractual subordination of the issues, ACRA regards them as equal to other existing and future unsecured and unsubordinated debt obligations of the Bank in terms of priority. According to ACRA’s methodology, the credit ratings of the issue are equivalent to that of Otkritie. The credit rating of the Bank has been assigned the status “Rating under review: developing” and therefore the bond issues listed above have also been assigned the status “Rating under review: developing”.
regulatory disclosure
The credit ratings have been assigned to “Bank Otkritie Financial Corporation” (PJSC) and the bond issues (ISIN RU000A101GR3, RU000A102R73, RU000A1035Y6, RU000A103PT6) of “Bank Otkritie Financial Corporation” (PJSC) under the national scale for the Russian Federation based on the Methodology for the Analyzing Rated Entities Associated with a State or a Group, Methodology for Credit Ratings Assignment to Banks and Bank Groups Under the National Scale for the Russian Federation, and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities. The Methodology for Assigning Credit Ratings to Financial Instruments under the National Scale for the Russian Federation was also applied to assign credit ratings to the above issues.
The credit ratings of “Bank Otkritie Financial Corporation” (PJSC) and the bond issues (ISIN RU000A101GR3, RU000A102R73, RU000A1035Y6, RU000A103PT6) of “Bank Otkritie Financial Corporation” (PJSC) were published by ACRA for the first time on July 3, 2017, March 3, 2020, February 12, 2021, June 10, 2021, and September 23, 2021, respectively. The credit rating of “Bank Otkritie Financial Corporation” (PJSC) and its outlook and the credit ratings of the bond issues (ISIN RU000A101GR3, RU000A102R73, RU000A1035Y6, RU000A103PT6) of “Bank Otkritie Financial Corporation” (PJSC) are expected to be revised by December 12, 2023.
The credit ratings were assigned based on data provided by “Bank Otkritie Financial Corporation” (PJSC), information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the consolidated IFRS financial statements of “Bank Otkritie Financial Corporation” (PJSC) and the financial statements of “Bank Otkritie Financial Corporation” (PJSC) drawn up in compliance with Bank of Russia Ordinance No. 4927-U dated October 8, 2018. The credit ratings are solicited and “Bank Otkritie Financial Corporation” (PJSC) participated in their assignment.
In assigning the credit ratings, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided additional services to “Bank Otkritie Financial Corporation” (PJSC). No conflicts of interest were discovered in the course of credit rating assignment.
