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S&P Global Ratings upgraded ratings on Alfa-Bank (Russia) to ‘BBB-’ with “Stable” outlook

October 13, 2021. TAG: Financial Services

S&P Global Ratings upgraded ratings on Alfa-Bank to ‘BBB-’ – up to the level of Russia’s sovereign credit rating – the outlook is “Stable”. In April 2021 Alfa-Bank also received the investment grade from FitchRatings (BBB-, “Stable” outlook). Alfa-Bank is the only privately owned bank in Russia with any investments-grade credit ratings, one of which is at the level of sovereign.

S&P mentioned that this rating action reflects the bank’s consistently good operating performance, stable asset quality metrics, and solid track record of navigating through turbulence. In first-half 2021, the bank’s annualized return on assets reached 2.8% with a cost-to-income ratio of 37%, which compares favorably with those of the bank’s Russian and international peers.

“Alfa-Bank remains the largest, most stable and efficient private Russian bank. And it continues to grow dynamically. The ratings upgrade is another confirmation of Alfa-Bank’s reliability and sustainability. Consistently excellent performance is the result of well-implemented clear strategy, aimed at strengthening of market positions, digitalization, scaling up the Phygital branch network, and provisioning of high quality banking service to our clients”, said Alexei Tchoukhlov, Deputy Chairman of the Executive Board, Chief Financial Officer.

S&P believes that Alfa-Bank’s earnings buffer is stronger than that of its peers, which indicates that Alfa-Bank has greater capacity to cover normalized losses than peers, and this continues to support its capital base. Also S&P notes the Alfa banking group’s efficient risk-management framework, which supports high quality of assets, even in challenging operating conditions.

S&P upgraded rating on ABH Financial Holdings Ltd. (ABHF) by two notches to ‘BB+’, the outlook is “Stable”.

Alfa-Bank (Russia)

ABH Holdings S.A. (ABHH) is a privately owned Luxembourg-based investment holding company investing into several banking groups in the CIS and Europe. ABHH includes Alfa-Bank (Russia), Alfa-Bank (Ukraine), Alfa-Bank (Belarus), Alfa-Bank (Kazakhstan) and Amsterdam Trade Bank N.V.

Alfa-Bank (Russia), founded in 1990, has developed rapidly to become one of Russia's leading privately owned banks. It provides a full range of banking services — corporate banking, retail banking, investment banking, asset management and trade finance.