17 August 2023

Rating agency National Credit Ratings (NCR) has assigned an AA+.ru national-scale credit rating with a Stable outlook to Russian Agricultural Bank (RusAg, the Bank). RusAg's credit rating defined by its very strong positions in the most important segment for the Bank – agribusiness lending. RusAg accounts for about a third of the entire loan portfolio in this segment, including about 70% of financing seasonal work. The agency's experts noted that the Bank has an adequate capital reserve, both under RAS and IFRS, and sufficiently diversified funding. Liquid assets and additional liquidity cover the funds of the largest lenders with a significant margin. The management system corresponds to the development goals and the specifics of RusAg's business model. NCR notes the steady improvement in the Bank's financial result given the growing interest income and the decreasing cost of funding, RusAg's deep expertise in the field of agribusiness lending, as well as a decrease in the share of non-performing loans. According to the agency, the probability of providing RusAg with an extraordinary support by the shareholder, if necessary, is high, taking into account the high systemic importance of the Bank for the state. “The high credit rating assigned to Russian Agricultural Bank is the result of our systematic work aimed at continuous improvement of the Bank's financial performance. In recent years, RusAg has significantly improved the quality of its assets, formed a well-diversified resource base in terms of sources and maturity, strengthened the capital and increased operating income, and is demonstrating an increase in net profit. This, among other things, is facilitated by our business model with a focus on supporting the national agricultural industry,” said Mikhail Ferapontov, Deputy Chairman of the Board at RusAg. The decree of the Government of the Russian Federation No. 751 dated May 15, 2023 “On Amendments to Certain Acts of the Government of the Russian Federation” comes into force on November 17, 2023. This decree introduces a requirement for financial institutions to have at least two national-scale credit ratings of a certain level to attract funds from the federal budget, as well as state corporations and state companies’ deposits. Russian Agricultural Bank complies with new requirements. Established in early 2019, National Credit Ratings (NCR) is a wholly owned subsidiary of RBC, a major Russian media group. The Bank of Russia added NCR to the list of accredited ratings agencies in September 2019. Using the most rigorous criteria, NCR rates financial institutions and insurers, corporates of all kinds, holding companies, local and regional governments, and debt obligations. Following best global practices, NCR has set new transparency standards for the Russian ratings industry and instituted several innovations to promote clarity, knowledge and better understanding for the entire community.