ACRA affirms BBB+(RU) to LOCKO-Bank, outlook Stable

Analytical credit rating agency affirms BBB+(RU) rating of LOCKO-Bank, outlook Stable. The credit rating of LOCKO-Bank is based on the Bank's satisfactory business profile, strong capital adequacy, satisfactory risk profile, and adequate funding and liquidity position.

Agency experts assessed the bank’s high ability to generate equity, and also noted the bank’s high capital adequacy as in IFRS (Tier-1 ratio stood at 20.8% as of March 31, 2019) and regulatory standards (N1.2 stood at 12.5% as of July 1, 2019). At the same time, CTI (cost-to-income ratio) and NIM (net interest margin) figures, which have been indicative of the efficiency of Bank’s activities for the last three years, stand at around 53% and 6%, respectively. The quality of the bank's securities portfolio is rated as high.

The share of problem loans and potentially problem loans (according to the agency) in the loan portfolio as of April 1, 2019 decreased to 9.5%, while the level of coverage of problem loans with reserves increased by 23.6% compared to April 1, 2018. The credit rating assigned to LOCKO-Bank was first published by ACRA in 2017.

Alexey Parfenenok, Financial Director of LOCKO-Bank:

“The credit rating of an authoritative Russian agency at the level of BBB + (RU) is an objective confirmation of the compliance of our results with the stated plans. The Bank effectively implements the approved growth strategy, gradually moving to a digital model focused on remote servicing of clients, both individuals and legal entities. "We continue to shape the ecosystem of digital services, introducing new products to the market that are as personalized as possible and correspond to the best market trends."