UrBC, Moscow, April 26, 2012. The international rating agency Moody’s adjusted the rating outlook of Promsvyazbank to Negative. The experts took this step because of their concern over the bank’s capital adequacy level and the concentration of risks around the bank’s largest borrowers, RBC daily reports.

Moody’s took a new stance on the bank: the outlook on the company’s deposit and credit ratings has been demoted from Stable to Negative. This adjustment is based on the analysis of Promsvyazbank’s financial report for 2011 (drawn up in accordance with the Russian Accounting Standards), the analysts explain. The agency’s decision was influenced by the fact that the bank’s Tier 1 capital adequacy level came to 10.1 by the end of the year, which was lower than what the company’s Russian market counterparts managed to achieve. What is more, the bank’s top ten borrowers only comprise 18% of its lending portfolio and 136% of its Tier 1 capital.

Moody’s analysts say the bank announced it expected a 15% increase in portfolio volume, with the business expanding both in the business and retail sectors. This could actually be problematic as the bank has no surplus capital at the moment, the agency feels.