Press Releases / 19.11.2012

Press Release as of 19.11.2012

Commercial Bank «BFG-Credit»

CJSC AK&M Rating Agency confirmed the ‘A’ credit rating (stable outlook) assigned to Commercial Bank BFG-Credit (Limited Liability Company) (license no. 3068) as per the national scale.


The ‘A’ rating indicates that CB BFG-Credit (LLC) is qualified 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 Agency detected and formulated a number of arguments for the high rating score: the growing key performance indicators (capital, assets, net incomes, deposits), the fairly high loyalty of large customers, the absence of liquidity-specific issues.

For the last three years, equity capital of CB BFG-Credit (LLC) has been on the rise. As of October 1, 2012, it improved by RUB 138.8 million or 6.0% year-to-date.

The growing combined net incomes of the Bank is certainly favorable for the rating. In 2011, they increased by RUB 14.2 million or 2.2% year-on-year. In 9 months 2012, net incomes went up by RUB 75.3 million (16.1%).

The Bank’s net interest earnings accounting for most of its net income profile are still growing, which is another positive signal for the rating score. In 2011, they improved by RUB 49.8 million (11.7%); in 9 months 2012, net interest earnings rose by RUB 256.9 million (75.3%).

The Bank’s assets are steadily improving. In 2011, assets of CB BFG-Credit (LLC) increased by 24.2% (RUB 3,945.9 million) year-on-year; as of October 1, 2012, the assets were by RUB 2,596.4 million (12.8%) above what they had been at the start of the year, roughly meeting the average asset growth rate in Russia’s banking sector.

The growing amount of deposits made by individuals is also supportive of the Bank’s rating. In 2010-2011, deposits of the Bank’s private customers showed a more impressive growth than Russia’s banking sector did on average. This trend was also in force as of October 1, 2012: since the start of the year, the amount of deposits increased by 20.4% year-to-date against approximately 10.0% in the banking sector.

We tend to regard the fairly high customer loyalty of CB BFG-Credit (LLC) as another solid argument for the rating. 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) employ the services of CB BFG-Credit (LLC).

All liquidity ratios of the Bank are acceptable, meeting the Central Bank of Russia’s respective requirements. As of October 1, 2012, N2 ratio was 48.39%; N3 was 62.16%; N4 was 49.58%. Since our previous analysis, CB BFG-Credit (LLC) has never failed to keep its liquidity ratios within prescribed limits. The absence of liquidity-specific issues at the Bank may be considered as another stronghold of the rating.

At the same time, the shrinking profit, the high concentration of liabilities within one group of investors and the fairly high N7 ratio prevent a still higher rating score.

In particular, the shrinking profit in 2011 and for 9 months 2012 exerts pressure on the Bank’s rating. For three quarters 2012, the Bank’s profits turned out to be much below last year’s performance: pre-tax profit decreased by RUB 41.5 million (21.9%); profit after tax by RUB 47.7 million (36.4%) year-on-year. In 2011, pre-tax profit decreased by RUB 22.9 million (9.7%), profit after tax by RUB 16.4 million (10.1%).

Another risk factor for the Bank is the fairly high concentration of liabilities within one group of investors. As of October 1, 2012, the largest group of depositors accounted for 23.17%, the 5 largest investors (groups of investors) for 41.76% of all the liabilities.

The maximum amount of large credit risks (N7) is well above the average level in Russia’s banking sector, although it is still below the maximum percentage of 800% set by the Central Bank of the Russian Federation. As of October 1, 2012, the N7 ratio was 626.1%, which is fairly high.

Full business name, as per the corporate website: Commercial Bank BFG-Credit (Limited Liability Company).

Short business name: CB BFG-Credit (LLC).

CB BFG-Credit (LLC) has been active in the market of banking services since 1994. The Bank possesses general banking license no. 3068 granted by the Central Bank of the Russian Federation on April 22, 1999.

The Bank participates in the compulsory deposit insurance scheme, DIS registration no. 730 as of March 3, 2005.

CB BFG-Credit (LLC) provides the standard range of banking products and services involving Russian rubles and foreign currencies.

Headquartered at Kutuzovsky Prospekt 35/30 in Moscow, CB BFG-Credit (LLC) operates a network consisting of 4 branches, 23 additional outlets, 5 operational offices, 2 stand-alone cash desks and 4 representative offices.

The auditor of the Bank’s financial statements as per RAS is Alt-Audit LLC, certificate of membership in the SRO Audit Chamber of Russia (a non-profit partnership) no. 463 as of 12/28/2009, principal registration number 10401001986). The Bank’s IFRS financial reports are audited by ZAO Deloitte & Touche CIS.

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This press release is based on the statement of assigning a credit rating to JSCB Primorye.

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.

CJSC 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.

CJSC AK&M 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).

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 companies implementing investment projects), and 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.

CJSC AK&M Rating Agency
ul. Gubkina 3
Moscow, Russia
Press release by: Y.B. Kuznetsova
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.