Press Releases / 11.11.2014
Press Release as of 11.11.2014
CJSC AK&M Rating Agency affirmed the national scale credit rating of Bank RUBLEV (license no. 3098) at 'A', tier 2, with a stable outlook.
The 'A' rating indicates that Bank RUBLEV qualifies as a highly creditworthy borrower. The risk of a failure to meet obligations in time is low, the full or partial debt restructuring risk is minimal.
Bank RUBLEV qualifies as a medium-sized Russian credit institution looking at the amount of business. As of July 1, 2014, the Bank ranked 199th in terms of asset size, 355th in terms of equity capital, 217th in terms of retained earnings among Russian banks.
Headquartered in Moscow, Bank RUBLEV is operating in 11 regions of Russia. Apart from the HQ, its network comprises 4 branches, 5 satellite offices, 3 operational offices and 5 loan desks. The Bank provides the whole range of banking products and services involving Russian rubles and foreign currencies to legal entities and private customers.
We regard the steady growth of balance sheet indicators, the profitable operations and the high share of earning assets as positive rating drivers for Bank RUBLEV.
In 2014, the Bank's liabilities remained on the previous year's favorable trend. In particular, they expanded by RUB 686.1 million (5.1%) for the first half of the year, by RUB 1,779.3 million (14.4%) compared with July 1, 2013. The resource base growth was driven by term deposits of private clients and funds of the Bank of Russia.
As a result of the authorized capital growth by RUB 140 million and the subordinated loan increase by RUB 96.1 million, the credit institution's capital expanded by RUB 207.3 million (16.2%) against July 1, 2013. The share of authorized capital in the equity capital stays high (35.3%, far above the average percentage of 21%), which we regard as a positive rating driver.
The growth of liabilities entailed a corresponding increase in the Bank's assets by RUB 1,912.3 million (14.6%). We appreciate the outstripping growth of earnings in the asset structure (+17.8%). As a result, the combined share of key earning assets (net loans receivable and net investments in securities) reached 78.6%. The Bank maintained a substantial percentage of highly liquid assets (10.7%).
Another positive argument, in AK&M Rating Agency's view, is the Bank's consistently profitable operations in 2011-2013. This year, the outstripping growth of earning assets triggered an increase of pre-tax profit and net profit (24.6% and 41.9%, respectively, in the first half of 2014 against the same period in 2013).
Over the period under review, the Bank has never failed to meet the Central Bank of Russia's requirements in terms of liquidity and credit risk ratios. Besides, Bank RUBLEV's liquidity profile is stronger than the average banking level. We also appreciate the improvements in liquidity ratios in 2013-2014.
At the same time, the rating reflects Bank RUBLEV's unimpressive capital adequacy ratio, high share of personal deposits in liabilities and high N7 ratio (maximum amount of large credit risks). Throughout 2013, the Bank's capital adequacy ratio stayed just over 11% but the growth of earning assets was backed by the credit institution's equity capital increase. This year, the Bank failed to maintain this balance, with the result of CAR falling to 10.16% as of July 1, 2014. However, the Bank overcame this negative trend in the following months bringing back the capital adequacy ratio to 11.09% as of October 1, 2014.
Another rating constraint is the high relative share of retail deposits in the Bank's liabilities (60.2% of the total liabilities as of July 1, 2014, far above the average level of 33.7% in Russia's banking sector). This, given that this percentage is still looking up, jeopardizes diversification of the Bank's liabilities, which spells higher insolvency risks in case the economy faces a crisis. We also highlight the Bank's fairly high N7 ratio (maximum amount of large credit risks, 480%-530%). While staying away from the regulatory limits, it is still far above the average level in Russia's banking sector (200%-230%).
Full Bank: Joint Stock Commercial Bank RUBLEV.
Short name: Bank RUBLEV.
Bank RUBLEV has been active in the market of banking services since 1994. The Bank of Russia registered it under no. 3098. The Bank possesses a license to provide banking services involving Russian rubles and foreign currencies (without accepting money deposits from individuals) as of November 7, 2012 and a license to accept ruble-denominated money deposits from individuals as of November 7, 2012.
This press release is based on the Statement of assignment of a credit rating to Joint Stock Commercial Bank RUBLEV.
The 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 a recommendation to purchase or sell securities, or to lend funds.
AK&M Rating Agency shall not be held liable for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.
CJSC Analysis, Consulting and Marketing 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) and is on the Central Bank of Russia's Register of Accredited Rating Agencies.
CJSC AK&M Rating Agency
Ul. Gubkina 3, Moscow, Russia
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.