Press Releases / 04.07.2012
Press Release as of 04.07.2012
CJSC AK&M Rating Agency confirmed the ‘A+’ credit rating (stable outlook) assigned to OJSC BALTINVESTBANK (license no. 3176) as per the national scale
OJSC BALTINVESTBANK as a highly reliable borrower. Risk of a delay in meeting liabilities is insignificant.
OJSC BALTINVESTBANK is supported by its improving KPIs.
Over the whole period under review (2007-2012) assets of the Bank are growing. In 2011, they increased by 17.6% year-on-year. As of April 1, 2012, the Bank’s assets were estimated at almost RUB 59.5 billion (+2.9% against January 1, 2012).
The Bank’s equity capital growth rate in 2010-2011 was above the average capital growth rate in Russia’s banking system. In 2011, the Bank’s equity capital rose by 30.0% against 2010, whereas the average growth rate in Russia’s banking system was 10.8%. The equity capital increase was driven by a subordinated loan in the amount of RUB 1,000 million taken out by the Bank and the growing retained earnings. As of June 1, 2012, the Bank’s equity capital decreased a little down to revaluation of its securities.
One of essential arguments for the rating score of OJSC BALTINVESTBANK is its high profitability. Pre-tax profit for 2011 (form 807) increased considerably to RUB 504.2 million from RUB 281.8 million for 2010 (+79%). The profit increased due to the growing net interest incomes after provisions against possible losses, net fee and commission incomes. In Q1 2012, pre-tax profit was RUB 167.6 million increasing the result achieved in Q1 2011 (RUB 93.6 million) by 79%. In 2011, by Bank’s net profit reached RUB 295.7 million, the highest value in the period under review (2007-2011) and surpassing the net profit for 20103-fold. In Q1 2012, the Bank’s net profit totaled RUB 140.7 million, which is almost 4 times above the Q1 2011 result.
funds attracted from individuals is on the rise, the growth rate exceeding the average level in Russia’s banking system. In 2011, the Bank received from individuals increased by 42.7% against 20.9% on average in Russia’s banking system. As of April 1, 2012, this amount increased by 2.7% year-to-date to RUB 20,338 million (against 1% on average in Russia’s banking system for the same period).
OJSC BALTINVESTBANK has achieved comfortable diversification of funding sources. Funds placed by customers account for the largest share of the Bank’s obligations. The concentration of liabilities within one group of depositors is low, indicating that its dependence on large customers is not high.
The quality of the Bank’s loan portfolio remains high. The share of hopeless and non-performing loans in the Bank’s loan portfolio as of June 1, 2012 was 4.9%, below the average level in Russia’s banking system (about 7%). This indicates that the Bank’s credit policy is well-balanced and the credit risk is low. Class 1 loans and class 2 loans together account for 81.2% of the Bank’s loan portfolio, roughly matching the average value in the banking system of the Russian Federation (82-83%).
The structure of assets and liabilities of OJSC BALTINVESTBANK is satisfactory in terms of currency. Short-term assets prevail in the liquid asset structure (assets of up to 90 days account almost 70% of the liquid assets); long-term obligations account for most of the Bank’s liabilities, which somewhat reduces liquidity loss risks.
The low capital quality remains one of the arguments against the rating score. The Bank’s authorized capital is RUB 256.8 million (4.1% of the equity capital, far below the average level in Russia’s banking system, 24-25%).
In 2012, the Bank’s capital adequacy ratio (N1) is below the average value in Russia’s banking system. The average CAR value in 2012 is 11.5% against 14.6% on average in the banking sector of the Russian Federation.
The high concentration of credit risk also restricts the rating score. The maximum amount of large credit risks (N7) and the total magnitude of insider-specific risk (N10.1) is above average, yet does not exceed the maximum acceptable value set by the Central Bank of the Russian Federation.
OJSC BALTINVESTBANK has been active in the market of banking services since 1994 being among the 500 largest banks of Russia. OJSC BALTINVESTBANK possesses general banking license no. 3176 issued by the Central Bank of Russia on March 5, 2012
The Bank participates in the compulsory insurance scheme, DIS registration certificate no. 824 as of March 21, 2005).
OJSC BALTINVESTBANK provides the standard range of banking products and services involving Russian rubles and foreign currencies. The Bank prioritizes servicing large and mid-sized enterprises in various spheres of business in the Northwest federal district and other regions of Russia, as well as lending to SME businesses.
The Bank's auditors are:
Research, Consulting, Audit, Developments LLC (primary registration number 10305004296 in the State Register of Self-regulatory Audit Organizations; also, it is a member of the Russian College of Auditors (a nonprofit partnership) registered in the State Register of Self-regulatory Audit Organizations pursuant to order no. 675 of the Ministry of Finance of Russia as of 12/22/2009).
CJSC KPMG (primary registration number 10301000804 in the State Register of Self-regulatory Audit Organizations; also, it is a member of the Audit Chamber of Russia (a nonprofit partnership) registered in the State Register of Self-regulatory Audit Organizations pursuant to order no. 455 of the Ministry of Finance of Russia as of 10/01/2009).
This press release is based on the statement of assigning a credit rating to OJSC BALTINVESTBANK.
The credit rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Company's reliability and shall not be considered as advice on the purchase and sale of securities or the provision of loan facilities to the Bank.
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.
AK&M Rating Agency is a leading independent national rating agency engaged in rating activities since 1993.
AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010).
AK&M Ratings are recognized by the Central Bank of Russia (for providing unsecured lending facilities – Provision 323-P), Vnesheconombank (for granting subordinated loans) and SME Bank (for its program of lending to SME businesses), RUSNANO (when selecting banks to provide business banking services to project and engineering entities implementing investment projects), the MICEX (as a prerequisite for including bonds in the Corporate Bond Index / MICEX CBI and Municipal Bond Index / MICEX MBI calculation base and for listing bonds). Pursuant to an order of Russia's Government AK&M Ratings count for approving the capitalization increase procedure for banks. Besides, AK&M Rating Agency is recognized by AHML and accredited by SRO National Securities Market Association.
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