Standard & Poors Affirmed Long-Term Rating on Renaissance Credit at В
OREANDA-NEWS. December 30, 2011. Commercial Bank Renaissance Capital (LLC), which operates under the Renaissance Credit brand, announces about affirmation of its credit rating under Standard & Poor's revised bank criteria.
Standard & Poor's Ratings Services affirmed its long-term counterparty credit ratings on Renaissance Credit at 'B' and the
The agency’s report mentions high earnings generation capacity, positive trend in portfolio quality and adequate liquidity among the key factors supporting the rating.
The agency’s analysts note that high earnings generation capacity should allow the bank to finance its growth and maintain adequate capitalisation. While lower credit costs, higher fee and commission income and a tighter cost control are expected to contribute to profitability improvement.
Standard & Poor’s considers that Renaissance Credit's loan portfolio quality – while remaining potentially volatile – has improved and will likely perform better in an economic downturn thanks to revised risk-management standards and more conservative lending policies.
Agency’s adequate assessment of the bank's liquidity position reflects its capacity to address liquidity shortages by drastic reductions in loan production and in interbank and central bank borrowing, including direct repurchase agreement transactions and uncollateralised and collateralised loans.
“Rating review was initiated following the implementation of new bank criteria which reflect recent changes in the macro-economic environment. We believe that affirmation of the rating at ‘B’ level is a result of successful implementation of the bank’s strategy to improve asset quality, operational efficiency, profitability and diversify its funding base”, commented Alexey Levchenko, Chief Executive Officer or Renaissance Credit.
“The stable outlook reflects our view that CBRC will likely keep its existing business model and focus on consumer lending, with adequate capitalization, and gradually improving operational efficiency,” notes Standard & Poor’s in its report.
Renaissance Credit financial results for the first nine months of 2011:
The Bank’s net profit for the period was RUB 1,805.1 mn cccording to International Financial Reporting Standards (IFRS).
The Bank’s total credit portfolio grew by 35.9% to RUB 44.1 bn.
Credit portfolio quality continued to improve. Non-performing loans (more than 90 days past due) amounted to 4.8% of the gross loan portfolio as at 30 September 2011 (6.3% as at 31 December 2010, 7.7% as at 30 September 2010).
The proportion of high-margin products in the portfolio – cash loans and credit cards – grew from 61% as at 31 December 2010 to 69.4% as at 30 September 2011.
In 2011, Renaissance Credit continued to pursue its funding strategy aimed at maintaining a diversified base of funding sources.
During the nine months of 2011, retail deposits increased by 42% to RUB 21.6 bn and constituted 58.3% of the Bank’s funding base as at 30 September 2011.
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