Press Releases / 27.11.2014

Press Release as of 27.11.2014

Commercial Bank «BFG-Credit»

CJSC AK&M Rating Agency affirmed the national scale credit rating of Commercial Bank BFG-Credit (LLC) (license 3068) at 'A', tier 1. The outlook is stable.

The 'A' rating indicates that Commercial Bank BFG-Credit (LLC) qualifies as a highly reliable borrower. The risk of a delay in meeting obligations is low, the full or partial debt restructuring risk is minimal.

Commercial Bank BFG-Credit (LLC) headquartered in Moscow qualifies as a medium-sized Russian credit institution in terms of the amount of business. The Bank provides the whole range of banking products and services involving Russian rubles and foreign currencies to legal entities and private customers.

We appreciate the growing key performance indicators (equity capital, assets, deposits, profit performance), the fairly high loyalty of major clients as the positive rating drivers for the Bank's rating.

Equity capital of Commercial Bank BFG-Credit (LLC) has been improving for the last three years. For the 9-month period in 2014, they increased by RUB 897.6 million rubles (+38.7%).

The Bank's assets are also on a steadily positive trend. In 2013, they increased by RUB 10,119.5 million (45.8%). For the 9-month period in 2014, the Bank's assets further improved by RUB 6,443.6 million (20.0%), substantially above the average asset growth rate in Russia's banking sector (11.6%).

The growth of private deposits also contributes to the Bank's credit rating. In 2012-2014, the growth rate of retail deposits raised by the Bank exceeded the average levels in Russia's banking system. In particular, retail deposits raised by the Bank for 9 months of 2014 increased by 16.7%, against a mere 2.0% in the banking sector.

The growing profits in 2013 and for the 9-month period in 2014 is another positive argument for the Bank's rating. For three quarters of 2014, the Bank's profit performance saw a substantial increase compared with the corresponding period in 2013: pre-tax profit by RUB 805.9 million (3.4 times); net profit by RUB 810.3 million (8.4 times).

In AK&M Rating Agency's view, Commercial Bank BFG-Credit (LLC) benefits from a fairly loyal clientele. Its key customers are television and radio companies, production centers and other participants of the mass communications market maintaining long-time and mutually beneficial relations with the Bank. Among others, All-Russian State Television and Radio Broadcasting Company / VGTRK, Channel One International Network, Okno-TV, Mir TV, Harmony Studio Non-stop Production (motion picture company) are the Bank's clients.

At the same time, the loan portfolio deterioration (the growing percentage of problem and non-performing loans), the rising share of overdue loans with payment delays up to 30 days, the low profitability, the hefty concentration of liabilities in one group of depositors and the fairly high N7 ratio are constraining the Bank's rating.

For 9 months of 2014, the share of problem and non-performing loans increased to 18.4% (13.3% as of January 1, 2014, 11.8% on January 1, 2013). The growing share of overdue loans with payment delays under 30 days is another point of concern. From 2.5% at the start of 2014, their share increased to 6.0% at the end of September 2014.

The low ROE and ROA ratios (10.4% and 0.7% on average in 2014, respectively) are also putting pressure on the Bank's rating.

Another risk factor for the Bank is the lumpy funding base. As of October 1, 2014, the maximum share of liabilities attributable to one group of depositors was 11.2% while 10 largest depositors (groups of depositors) accounted for 51.1% of the Bank's total liabilities to clients (excluding the obligations arising from the subordinated loan, obligations to credit institutions and the Central Bank of Russia).

The maximum amount of major credit risks (N7) is considerably exceeding the average percentage in Russia's banking sector, although below the upper limit of 800% set by the Central Bank of Russia. As of October 1, 2012, the Bank's N7 ratio was 544.5%, which is uncomfortably high. In 2014, the maximum amount of major credit risks was in the 507-569% range (against 204%-230% in Russia's banking sector).


Full Bank name: Commercial Bank BFG-Credit (Limited Liability Company).

Short name: Commercial Bank BFG-Credit (LLC).

Commercial Bank BFG-Credit (LLC) has been operating in the market of banking services since 1994. The Bank of Russia assigned it registration number 3068. The bank has a general license for banking activities as of February 19, 2013 and a license to place and accept deposits of precious metals as of April 22, 1999. In 2005, the Bank was registered as a member of Russia's compulsory deposit insurance system (Registration Certificate no. 730).

The Bank provides services to major mass media players as well as military-industrial, construction, housing and utility companies, well-known auto dealers, retailers and social institutions.

The Bank's independent auditor of RAS accounts is Alt-Audit LLC. The Bank's independent auditor of IFRS reports is ZAO Deloitte & Touche CIS.


This press release is based on the Statement of assignment of a credit rating to Commercial Bank BFG-Credit (LLC).

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.