AK&M Rating Agency confirmed the ‘A’ credit rating assigned to CB BFG-CREDIT (limited liability company) as per the national scale, revising the outlook from stable to positive
The ‘A’ rating qualifies CB BFG-CREDIT (LLC) as a highly reliable borrower. Risk of a delay in meeting liabilities is relatively low, restructuring risk for a loan / part of a loan is minimal.
The credit quality of CB BFG-CREDIT (LLC) is highly likely to remain at the same level during the whole rating validity period, AK&M Rating Agency’s experts believe.
One of the essential arguments for the high rating score of CB BFG-CREDIT (LLC) is its high profitability in recent years. Net profit of CB BFG-CREDIT (LLC) for 2010 was RUB 173.5 million surpassing the 2009 result 1.5-fold. Net profit of CB BFG-CREDIT (LLC) for H1 2011 was RUB 120.9 million rising 1.3-fold year-on-year. This favorable result is mainly driven by the growing net interest income. Besides, the Bank’s profit is relatively stable over the year, which facilitates forecasting the cash flows. In recent years, the Bank has retained all its profit, which, coupled with its appreciable amount, ensures a good replenishment source for the Bank’s equity capital.
The loan portfolio of CB BFG-CREDIT (LLC) is of good quality. As of September 1, 2011, arrears on the loans granted by the Bank totaled 1.8% of the loan receivables, twice below the average value in Russia’s banking system (4.5%).
Provisions against possible loan losses as of July 1, 2011 totaled RUB 2,672.5 million (against about RUB 1,911 million one year before), which is 8 times more than the loan arrearage. The Bank’s reserve rate is above average Russian level. The reserves established by the Bank can be regarded as sufficient for a loan portfolio of similar quality, which cuts down the Bank’s credit risks essentially.
The customers of CB BFG-CREDIT (LLC) may be called highly loyal. Its principal 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. It will be noted that most of the largest companies in this market segment (RIA Novosti,          All-Russian State Television and Radio Broadcasting Company / VGTRK,             Channel 1 Public Russian Television and the Interstate Television and Radio Broadcasting Company Mir) are the customers of CB BFG-CREDIT (LLC). Besides, CB BFG-CREDIT (LLC) provides services to BFG Media Production (also a big player in the cinema and television production market on friendly terms with the Bank).
The rating score of CB BFG-CREDIT (LLC) is restricted by the low equity capital adequacy. As of October 1, 2011, CAR (N1) was 13.01% (for reference, it was 16.10% in Russia’s banking system). Besides, the share of supplementary capital (Tier 2 capital) in the bank’s equity capital is high. Over the last two years, it was 35-45% on average reaching 48.9% as of August 1, 2011. At the same time, the Bank’s supplementary capital almost entirely comes from its subordinated loan and current-year profit - which raises the quality of the Bank’s equity capital. Return on assets for 2011 was 0.9%, somewhat below the average Russian level.
Also, the rating score is under the pressure of the low instant liquidity ratio. As of October 1, 2011, N2 was 23.95% (the minimum acceptable percentage being 15%). However, CB BFG-CREDIT (LLC) has never failed to meet the Central Bank’s applicable requirements in the way of liquidity.
CB BFG-CREDIT (LLC) has been active in the market of banking services since 1994 being a large-sized bank in the amount and volume of operations among the Russian banks. Headquartered in Moscow, the bank is also active in 6 constituents of the Russian Federation (Moscow, Primorsky Krai, Yaroslavl region, Saratov region, Kaliningrad region, Kaluga region). The Bank’s PoS network consists of 4 branches, 14 additional outlets, 1 operational office and 3 stand-alone cash desks. The network covers Moscow, Kaluga, Yaroslavl, Rybinsk and Tutaev (Yaroslavl region), Saratov, Kaliningrad and Vladivostok. The Bank has representative offices in Ulyanovsk, Voronezh, Kaliningrad and Makhachkala. The Bank’s ATM network consists of 28 ATMs (17 of them located in Rybinsk). The Bank has issued more than 3,000 plastic cards.
As of August 1, 2011, CB BFG-CREDIT (LLC) ranked 125th in the amount of net assets. As of July 1, 2011, the Bank's net assets totaled RUB 22 ,603.6 million, equity capital was estimated at RUB 2,295.9 million.
CB BFG-CREDIT (LLC) possesses general banking license no. 3068 granted to it by the Central Bank of the Russian Federation on April 22, 1999. In March 2005, the Banking Supervision Committee of the Central Bank of Russia permitted CB BFG-CREDIT (LLC) to join the Deposit Insurance System (DIS). The auditor of the Bank’s financial reports as per IFRS is Deloitte and Touche Tohmatsu.
Today, CB BFG-CREDIT (LLC) is a universal credit institution providing a wide range of banking services to private and corporate customers.

This press release is based on the statement of assigning a credit rating to CB BFG-Credit (LLC).
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 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, 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.Y. Zolotokopov
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.
E-mail: zolotokopov@akm.ru