Press Releases / 02.04.2014
Press Release as of 02.04.2014
CJSC AK&M Rating Agency affirmed the national scale credit rating of JSC Coalmetbank (license no. 2997) at 'A', tier 3, with a stable outlook.
The 'A' rating indicates that JSC Coalmetbank is a highly reliable borrower. Risk of a delay in meeting obligations is relatively low, restructuring risk for a loan / part of a loan is minimal.
In AK&M Rating Agency's view, the positive rating drivers for the Bank are the sufficient capital adequacy and profitability, the relatively low funding costs, and a strong liquidity position.
Capital adequacy of JSC Coalmetbank is at a comfortable level: N1.1 = 8.84%, N1.2 = 9.57%; N1.0 = 12.75% as of March 1, 2014. The Bank's capital adequacy ratios meet the Central Bank of Russia's applicable requirements always staying within the regulatory limits.
The Bank is a profit-making institution operating above the break-even point. In 2013, its pre-tax profit was RUB 53.9 million, net profit reached RUB 1.3 million. Return on assets was 0.5%, return on equity 5.1%.
The relatively low cost of debt (compared with the Bank of Russia's refinancing rate) is also contributing to the rating. In 2013, the cost of liabilities and interest rates on customer deposits did not exceed 5% p.a.
JSC Coalmetbank has a strong liquidity position. As of March 1, 2014, the Bank's acid test ratio was 77.72%, current liquidity ratio was 107.72% (the minimum acceptable values being 15% and 50%, respectively). Long term liquidity ratio was 50.88%, which is below the maximum acceptable percentage of 120%. As a whole, we regard the absence of liquidity weaknesses as a positive rating driver for JSC Coalmetbank.
At the same time, the heavy investment in securities, the high share of problem and non-performing loans, and the shrinking customer deposits are working against the rating of JSC Coalmetbank.
We regard the high percentage of investments in securities in the Bank's assets as a risk factor. Since our previous review, the Bank has been highly committed to such investments which accounted for 56.5% of its total assets as of January 1, 2014.
Another negative signal for the rating of JSC Coalmetbank is the high combined share of problem and non-performing loans. On January 1, 2014, such loans accounted for 22.7% of the Bank's total loan portfolio, far above the corresponding average level in Russia's banking sector (5.9%), with little improvement by March 1, 2014 (20.8%). The high percentage of loan arrears (17.3% of the loans receivable as of March 1, 2014) is certainly putting pressure on the rating.
In 2013, the Bank's customer deposits plummeted by RUB 4,082.1 million (-45.5%), which has a negative impact on its rating.
Full Bank name: Joint-Stock Company Coalmetbank
Short name: JSC «Coalmetbank»
JSC Coalmetbank has been operating in the market of banking services since 1994. The Bank possesses general banking license of the Central Bank of Russia no. 2997 as of March 15, 2012.
The Bank is operating within the compulsory deposit insurance scheme, DIS registration certificate no. 115 as of October 28, 2004.
JSC Coalmetbank provides the standard range of banking products and services involving Russian rubles and foreign currencies and operates in the securities market. The Bank prioritizes operations in the stock market, lending to entities of the real economy, primarily in the coal mining and metallurgical sectors, and consumer lending pursuant to payroll card programs.
Apart from its Headquarters, the branch network of JSC Coalmetbank includes 2 branches, 8 satellite offices, 2 operational offices, 3 loan desks, 3 stand-alone cash desks. JSC Coalmetbank is operating in 7 regions in 4 federal districts of the Russian Federation.
The Bank's reports are audited by Altai-Audit-Consulting LLC (a member of nonprofit partnership Moscow Audit Chamber, principal number of registration entry 10303003293).
This press release is based on the statement of assigning a credit rating to JSC Coalmetbank.
The credit rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Bank's creditworthiness and shall not be construed as advice on the purchase and sale of securities or the provision of loan facilities to the Bank.
CJSC AK&M Rating Agency will not incur any responsibility for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.
CJSC AK&M Rating Agency is a leading independent national rating agency engaged in rating activities since 1993.
CJSC AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010).
CJSC Analysis, Consulting and Marketing Rating Agency
ul. Gubkina 3
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.