Analytical Credit Rating Agency (ACRA) assigned BBB+(RU) credit rating with a stable outlook to LOCKO-Bank on August 16th, 2017. This positive grade is related to a high capital adequacy and a strong liquidity position.
LOCKO-Bank’s strategy which consists of a transition to a digital business format corresponds with the macroeconomic conditions in which the Bank operates and allows the Bank to achieve both an increase of the operational effectiveness and a reinforcement of the competitive advantages. The universal nature of the Bank’s business defines a high diversification of the operational income while retaining a stable dynamic of the past five years.
The agency's experts assessed the Bank's ability to generate its own capital as very high, and also noted the high level of capital adequacy of the Bank both in accordance with IFRS (Tier-1 - 21.5% as of March 31, 2017) and the regulatory standards (H1.2 - 13.1 % as of July 1, 2017). At the same time, the indicators characterizing the Bank's performance on the basis of the last three years are at a high level: the net interest margin (NIM) was 5.2%, the ratio of operating income to expenditures (CTI) was 41%.
The quality of the Bank's securities portfolio is rated as high. The quality of the loan portfolio was recognized as being acceptable with an insignificant concentration on the high-risk sectors, the largest borrowers and related parties. In general, the risk management of the Bank is recognized by the experts of the Rating Agency as being adequate and independent.
The credit rating on the national scale was assigned to LOCKO-Bank for the first time. The stable forecast presumes with a high probability the invariability of the rating for the next 12-18 months, while the top management of the Bank understands the change of which key indicators should lead to a positive rating action and takes it into account when defining the strategy of the Bank's activity for the medium term.
Alexey Parfenenok, the Financial Director of LOCKO-Bank:
"According to the rating methodology of ACRA, the assignment of the rating at the level of BBB + means the recognition by the Rating Company that the Bank's strategy is realizable and adequately responds to the realities of the modern banking market, corporate governance corresponds to the best business practices. At the same time, the Bank's ownership structure is transparent, there are no significant negative reputational factors and there is no dependence on related parties."