April Capital AM's Reliability Rating Lowered
OREANDA-NEWS. National Rating Agency has lowered its reliability rating on April Capital AM JSC (April Capital) to 'AA-'.
The rating downgrade reflects the considerable decrease in assets under the company's management. NRA associates this with the withdrawal of assets by a key client (April Capital's former owner) and the resultant loss of the company's share of the insurance reserve management market. April Capital's profitability metrics remain negative, albeit on an improving trend. The rating is also pressured by the company's equity reduction following the financing of past years' operating posses. Currently, the company is at the start of a new round of its development.
April Capital's AuM portfolio is made up of low-risk assets. The rating benefits from the fact that the company has entered into a trust management agreement with an open market insurer to manage RUB6 billion of insurance reserves, which helped reverse the outflow trend that affected the company's key business line (in terms of asset amounts).
Other rating strengths include the growth of the endowment assets market and slight upward trends on the company's other business lines observed in 1Q 2015.Additionally, NRA notes the optimization of April Capital's costs, enabling a gradual cost reduction.
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