Press Releases / 16.09.2011

Press Release as of 16.09.2011


JSCB Alef-Bank’s Depositary

AK&M Rating Agency assigned the ‘B+’ reliability rating as per the national scale, with a stable outlook, to JSCB Alef-Bank’s Depositary

 

AK&M Rating Agency assigned the ‘B+’ reliability rating as per the national scale, with a stable outlook, to JSCB Alef-Bank’s Depositary

The ‘B+’ rating indicates that JSCB Alef-Bank’s Depositary is sufficiently reliable. Risk of complete or partial default on obligations is low.

The reliability rating score of JSCB Alef-Bank’s Depositary is supported by the following arguments:

- the long experience of the Depositary. JSCB Alef-Bank’s Depositary has a long history as a professional participant of the securities market. The first agreement for depositary services was concluded in 1999;

- the loyal customer pool of the Depositary. More than half of the customers currently services by the Depositary concluded their service contracts before 2010. The number of customers increased considerably in 2010 and did not change in 2011;

- the Depositary services operations with securities quoted on the stock exchange. In 2011, the number of transactions on the customers’ depo accounts increased appreciably. Most of the custody transactions involved securities issued by companies listed on the stock exchange;

- being part of a Bank adds reliability. Reliability of Alef-Bank’s Depositary results from the applicable security and continuous operation regulations relevant for the whole credit institution, as well as high equity capital and profit. Equity capital of CJSC JSCB Alef-Bank as of August 01, 2011 was RUB 2.5 billion, pre-tax profit for H1 2011 was RUB 44.6 million.

At the same time, some things resist a higher reliability rating of JSCB Alef-Bank’s Depositary:

- the relatively small total number of customers using the Depositary’s services and issues of securities in custody. The number of customers does not show a convincing upward trend. These restrictions in the number of customers and issues of securities in custody reduce the total number of transactions impairing the overall customer service technology;

- the low automation of the custody services, with no electronic document flows between the Depositary and the customers. No automated data input in the depositary accounting system (which generates higher risks of technical errors and requires additional checks. No electronic document flow has been in use. It will be noted, however, that the Depositary is currently updating its software capacities to automate custodian accounting for securities dealing operations;

- the poor f\profitability of the depositary activity. The share of custody services in the total income of the Bank is insignificant. To ensure due financial security of its Depositary’s operation, the Bank has to redistribute incomes secured from other activities, which is possible as long as the whole credit institution’s operation is profitable.

Being a professional participant of the securities market, CJSC JSCB Alef-Bank is not member of a self-regulatory financial market participants’ organization, does not conclude professional liability insurance contracts, and its professional activity is not rated by independent experts. The Depositary’s development strategy assumes its possible accession to a self-regulatory financial market participants’ organization soon.

CJSC JSCB Alef-Bank has been active in the market of banking services since 1992. The Bank was granted general banking license no. 2119 in 2003, and a license for placing and accepting deposits of precious metals in 2010.

The bank is also licensed as a professional securities market participant (a license for custody services granted by the Federal Financial Markets Service on December 4, 2000; licenses for dealing, brokerage, depositary, securities management operations granted by the Federal Financial Markets Service on November 16, 2000; a license for exchange intermediary services granted on December 27, 2007.

In March 2005, the Banking Supervision Committee of the Central Bank permitted CJSC JSCB Alef-Bank to join the Deposit Insurance System (DIS). In March 2011, the Council of the Association of Russian Banks ruled to admit CJSC JSCB Alef-Bank as a member of the Association.

The Bank’s auditor is Vneshaudit Consulting LLC (license for auditing activities no. E001118 as of July 24, 2002 valid till July 24, 2012 issued pursuant to order 150 of the Ministry of Finance of the Russian Federation as of July 24, 2002; location: Prechistenka street 10, office 15, 119034, Moscow.

On December 27, 2010, the Bank of Russia’s Credit Institutions Licensing & Financial Rehabilitation Department registered bond issue 1 of CJSC Alef-Bank in the amount of RUB 1 billion.

CJSC JSCB Alef-Bank is a mid-sized Russian bank in the amount and volume of operations, with three branches in Kurgan, Lebedyan and Lysva.

As of August 1, 2011, the Bank’s equity capital was RUB 2,466,776 thousand. CJSC JSCB Alef-Bank provides the whole range of banking products and services involving Russian rubles and foreign currencies. Also, it is active in the market of precious metals and securities.

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This press release is based on the statement of assigning a reliability rating to CJSC JSCB Alef-Bank.

The rating score, 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.

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 and accredited by the Ministry of Finance of the Russian Federation. 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, for listing bonds and for providing access to the MICEX+ trading mode). 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.

 

CJSC Analysis, Consulting and Marketing Rating Agency

ul. Gubkina 3

Moscow, Russia

www.akmrating.ru

Press release by: A.M. Krachkovskaya

Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.

Email: anna_k@akm.ru

 

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