December 10, 2012 / 1:12 PM / 5 years ago

TEXT-S&P summary: ZAO UniCredit Bank

(The following statement was released by the rating agency)

Dec 10 -

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Summary analysis -- ZAO UniCredit Bank ---------------------------- 10-Dec-2012

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CREDIT RATING: BBB/Stable/A-2 Country: Russia

Primary SIC: Commercial banks,

nec

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Credit Rating History:

Local currency Foreign currency

13-Nov-2012 BBB/A-2 BBB/A-2

02-Aug-2011 BBB/A-3 BBB/A-3

17-Jun-2009 BBB-/A-3 BBB-/A-3

08-Dec-2008 BBB/A-3 BBB/A-3

16-Sep-2008 BBB+/A-2 BBB+/A-2

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Ratings Score Snapshot

Issuer Credit Rating BBB/Stable/A-2

SACP bb+

Anchor bb

Business Position Strong (+1)

Capital and Earnings Adequate (0)

Risk Position Adequate (0)

Funding and Liquidity Average

and Adequate (0)

Support +2

GRE Support 0

Group Support +2

Sovereign Support 0

Additional Factors 0

Major Rating Factors

Strengths:

-- High probability of support from 100% owner, UniCredit Bank Austria AG.

-- Strong position in the Russian banking system in corporate and retail, resulting in good earnings power.

-- Good liquidity management and better risk management than Russian peers.

-- Adequate capitalization.

Weaknesses:

-- Challenging operating environment in Russia.

-- Increasing pressure on margins in the Russian market.

-- High single-name funding concentrations.

Outlook

Standard & Poor's Ratings Services' outlook on Russia-based ZAO UniCredit Bank (UniCredit Russia) is stable, mirroring that on the long-term sovereign credit rating on the Russian Federation. It also reflects our view of the operating environment in Russia, which we consider to be gradually stabilizing, as well as our expectation that UniCredit Russia's improving asset quality and good financial performance are sustainable.

The ratings on UniCredit Russia are at the same level as the sovereign foreign currency ratings on Russia. Accordingly, any negative rating action on the ratings on the sovereign would have negative implications for the ratings on the bank. In addition, in the event of any negative rating action on the ultimate parent, the UniCredit group, which we currently rate one notch above UniCredit Russia, we would reassess the potential implications for the ratings on UniCredit Russia. We would notably monitor the SACP of the Russian bank and whether it would be negatively affected by contagion risks from the larger group, and if the likelihood of support from its direct owner, UniCredit Bank Austria, is diminishing.

Related Criteria And Research

-- BICRA Russia, March 19, 2012

-- Banks: Rating Methodology And Assumptions, Nov. 9, 2011

-- Banking Industry Country Risk Assessment Methodology And Assumptions, Nov. 9, 2011

-- Group Rating Methodology And Assumptions, Nov. 9, 2011

-- Bank Hybrid Capital Methodology And Assumptions, Nov. 1, 2011

-- Rating Government-Related Entities: Methodology And Assumptions, Dec. 9, 2010

-- Bank Capital Methodology And Assumptions, Dec. 6, 2010

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