Head of Russian national rating agency fired for pessimistic views

Yekaterina Trofimova will be stepping down from her position as the head of ACRA, the largest national rating agency in Russia that was founded by the Central Bank in 2015.

The dismissal of Trofimova, who has headed ACRA since its creation, was announced by Karl Johansson, chairman of the company’s board of directors.

The news was confirmed by two sources familiar with the situation.

Intended as a replacement for international ratings agencies, which dropped Russia’s rating to “junk status” following the imposition of US and EU sanctions, ACRA, under Trofimova, has been unable to tolerate the government’s degree of macroeconomic optimism or agree with the “breakthroughs” it publicizes.

Trofimova herself has made a series of gloomy predictions. On 15 January, the day before she was dismissed, she predicted a further decline of Russian banks, at the rate of 30-35 credit organizations per year.

“Roughly 5-7% of banks will leave the market for some reason or other every year for the next 5 years,” she said, “primarily for economic reasons, but to a lesser degree due to unscrupulous activity.”

A month earlier, in December, she gave a warning about the large debt burden on Russia’s subjects, and the threat of municipal debt defaults. In the last 10 years, she said that there have been at least 9 concealed regional debt defaults. These defaults were not publicized, but they have been documented in court rulings.

Russian bankers have no shortage of complaints against ACRA. A ruling by ACRA was the final straw that led to the banking crisis of 2017, which started with the flight of investments from the bank Otkritie, and ended with the nationalization of three of the country’s largest private banks.

In July 2017, ARCA gave Otkritie a rating of BBB, a record low for Russia’s core banks, and insufficient for the bank to hold funds from the federal budget or non-government pension funds. The rating saw Otkritie’s bonds excluded from the Central Bank’s Lombard list, and the ensuing mass withdrawal of corporate, government and retail deposits ultimately buried the bank.

In January 2019, ACRA lowered the rating of the bank DOM.RF (formerly “Russian Capital”), de facto prohibiting it from soliciting developer capital, despite the government’s plans to make it the country’s primary construction bank. In response, Nikita Stasishin, Deputy Minister of Construction, Housing and Utilities, accused the agency of incompetence.


  Russia, ACRA, Russian Central Bank