The ‘A’ rating indicates high credit capacity of the Company. Risk of a delay in meeting liabilities is relatively low, restructuring risk for the loan / part of the loan is minimal.
The improving performance of the Company sends a positive signal for its rating score. Since the Company’s activity started, its overall performance has been growing – which proves the efficiency of the development strategy chosen by the company and the high management quality. The Company’s position is improving on an aggressive expansion of its investment activities and the accelerating market penetration rate. In 2011, its revenue increased to RUB 6.7 billion. As of 12/31/2011, net asset value of the company increased by 39.3%, own funds by 97.4%. As of 3/31/2012, equity capital reached RUB 206.1 million meeting the equity capital sufficiency requirements for professional players of the securities market, management companies for investment / unit investment funds and non-state pension funds approved by order № 11-23/pz-n of the FFMS as of May 24, 2011. In 2011, the Company became an investment agent of the Republic of Belarus and Kirov region to the Russian Federation.
The financial standing of the Company may be regarded as good. The company’s debt burden is average, activity is satisfactory in terms of efficiency. Overall, the company’s profit is on an upward trend, with a fairly good growth rate. At the end of 2011, return on assets (ROA) increased by 3.15 percentage points year-on-year. Return on equity (ROE) also increased by 28.55 percentage points in 2011 against the previous accounting period. While ROA and ROE are average, the Company is capable of generating profitable cash flows.
At the end of 2011, liabilities to assets ratio was 89% increasing the 2010 value by 4 percentage points. The low debt to revenue ratio of the Company proves the low burden on it, which is another argument for the rating score. As of late 2011, liabilities to revenue ratio was 15.8% (55 percentage points below the 2010 value). Our analysis reveals that the Company’s asset structure is of high quality.
One of the risk factors for the Company is its essential dependence on the market situation. The lack of economic stability, the falling stock markets and the losses their players incurred due to the global financial crisis resulted in an outflow of some clients from the financial markets. This, along with the little certainty in the way of how the markets may further develop in 2012, still constitutes an essential risk factor. However, the Company is showing the expanding customer base and the growing amount of business. Therefore, despite the high risks generated by the Company’s dependence on the macroeconomic environment, its KPIs prove the Company’s efficiency and growing loyalty of its customers even amidst the crisis. Since financial investments account for most of the Company’s assets, the market risk is the principal financial risk the Company incurs while investing in securities. Today, the Company’s income from the appreciation of its financial investments resulting from their revaluation exceed the related expenditures (RUB 237.6 million against RUB 99.9 million).
Another thing exerting pressure on the Company’s rating score is its small customer pool. At the same time, the customer base expansion potential is high enough as the Company provides a wide range of services in financial markets.
IC UFS Finance LLC established on May 5, 2008 (IC Arbat Finance LLC till September 25, 2009) is a subsidiary company of UFS Capital Partners Company. IC UFS Finance LLC is principally engaged in individual trust management of assets of physical persons and legal entities, brokerage services, dealer activities, depositary operations, stock / bond REPO operations and other activities. The company is a member of the self-regulating organization “National Association of Securities Market Participants” (NAUFOR) and the non-profit organization “INTERNATIONAL FINANCIERS GUILD”, an InvestorAwards winner. On October 16, 2008, the Company obtained licenses for professional dealer, brokerage and depositary activities as well as security management activities.
One of the Company’s advantages is its participation in the international group UFS Investment Company providing the whole range of services in financial markets, one of the key priorities being the private equity sector. The Company finances projects in the gold mining, mining and processing and food-processing segments with its own funds and through services in the security markets. For its asset formation activity and other operations in financial markets, UFS Investment Company factors in the high volatility of financial markets and applies the principle of diversification and using alternative instruments (such as the commodities markets, where necessary). This investment approach ensures comfortable balance with various market trends. The package of services provided by the group in the securities markets cuts down the Company’s specific costs, reduces its dependence on the particular market segment and yields competitive advantages when attracting customers.
This press release is based on the statement of assigning a credit rating to IC UFS Finance 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 and accredited by the Ministry of Finance of the Russian Federation.
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
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Press release by: A.V. Yakovenko
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.