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Press Releases / 28.12.2012
Press Release as of 28.12.2012 Bank «Solidarnost» CJSC AK&M Rating Agency rated Bank Solidarnost (license no. 1555) ‘A’ as per the national scale, with a stable outlook.
The ‘A’ rating indicates that Bank Solidarnost qualifies 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 rating score of Bank Solidarnost is essentially supported by the growing equity capital and its stable assets, the good net income structure, the high quality of loan assets, and the profitability of operations. On December 1, 2012, the Bank’s equity capital amounted to RUB 1,336.6 million including the authorized capital of RUB 300 million. Since the start of the year, equity capital increased by 4.4%. As of the last reporting date, the capital adequacy ratio was 11.9%. The good net income structure also supports the Bank’s rating. Net interest income accounts for more than 97% of the total net income. Another argument for the rating score is the growing net profit of Bank Solidarnost this year. At the end of three quarters 2012, the Bank’s net profit amounted to RUB 29.9 million increasing by 59.4% year-on-year. The net profit is still on the rise in the fourth quarter 2012. As of October 1, 2012, assets amounted to RUB 11,582.9 million increasing by RUB 139.3 million (1.2%) over the 9-month period. Net loan receivables and net investments in securities account for most of the Bank’s assets (46.4% and 37.3%, respectively). The Bank has achieved a good structure of loan assets. Loans of quality grades 1 and 2 account for more than 87% of all the loan receivables. Also, 98.8% of the loans granted by the Bank are fully secured by pledges or guarantees, 1.06% of the loans are partially secured, while straight loans account for a mere 0.14% of Bank Solidarnost’s loan portfolio. This certainly is another positive signal for the Bank’s rating score. At the same time, the fairly high loan arrears detected at the end of the third quarter 2012, the excess of interest expenses over interest incomes and the net loss for the third quarter (the 9-month profit result being positive) excess pressure upon the Bank’s rating. As of October 1, 2012, arrears on the loans granted by Bank Solidarnost reached almost 4% of the total loan portfolio, exceeding the 9-month 2012 net profit almost 7-fold. The Bank’s interest costs exceeded its interest incomes by RUB 18 million in the third quarter 2012. It will still be noted that the 9-month interest balance shows a surplus of interest incomes over interest costs. Net losses in the third quarter 2012 amounted to RUB 6 million (although the Bank’s net profit for 9 months calculated as progressive total was still positive). The Bank (full business name as per the corporate website: Bank of trade-unions’ solidarity and social investment "Solidarnost"; short business name: Bank Solidarnost) has been active in the market of banking services since 1991. The Bank of Russia assigned it registration number 1555 as of September 2, 1991, license 1555 as of August 10, 2012. Since 2005, Bank Solidarnost supports the deposit insurance scheme (registered in the DIS agent register on February 10, 2005). Bank Solidarnost focuses on providing all kinds of banking products and services involving Russian rubles and foreign currencies, as well as operations in the securities market.
This press release is based on the statement of assigning a credit rating to Bank Solidarnost. The credit rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Bank'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 – Regulation 323-P), Vnesheconombank (for granting subordinated loans) and SME Bank (for its program of lending to SME businesses), RUSNANO (when selecting banks to provide cash and settlement 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 the recapitalization of banks. Besides, AK&M Rating Agency is recognized by AHML and accredited by SRO National Securities Market Association.
CJSC AK&M Rating Agency
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