The Analytical Credit Rating Agency (ACRA) has conducted its third annual Russian rating industry survey. In 2018, the survey was carried out for the first time after the transitional period of reforming this sector in Russia.
88% of the respondents stated that, on the whole, they trust the ratings assigned by agencies operating in Russia. It is a maximum level of trust demonstrated over the past two years. The greatest degree of trust is demonstrated by those financial market players who use credit ratings based on both national and international rating scales as complementary tools in taking investment decisions. According to ACRA, this practice is becoming increasingly widespread.
Stricter state regulation of the sector and correct (as seen by market players) risk assessments of the rated issuers are the key drivers of trust in credit ratings. Over the past year, ratings assigned by agencies operating in the Russian market have gained trust among 42% of respondents, versus 30% in 2017 and mere 8% in 2016. The main factors undermining the trust include credit risk underestimation, slow responsiveness and declining competitiveness in the Russian market. However, the share of respondents who believe that the current level of competitiveness in the rating industry pushes down the quality of ratings has decreased.
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Dissatisfaction over credit ratings penetration in the Russian market has declined over the past year. The respondents who use national-scale ratings only are the most satisfied with the coverage. Sectors least covered by ratings are construction and real estate, agro-industry, and IT and media.
Russian market reputation has become the main selection criterion applicable to rating agencies. Last year, respondents attached equal importance to reputation on the national and global markets.
