Fitch Ratings has upgraded LOCKO-Bank's Outlook to Stable

The international rating agency Fitch Ratings has affirmed LOCKO-Bank's Long-Term Issuer Default Ratings (IDRs) at 'BB-', upgrading the outlook from 'Negative' to 'Stable'. The revision of the Outlook reflects the agency's opinion on the reduction of pressure on the bank's credit profile from the pandemic. Fitch analysts believe that LOCKO's strong buffer of pre-impairment operating profit and healthy capital cushion will allow LOCKO-Bank to continue to neutralize potential pressure due to the economic situation.

The VR reflects the track record of stable performance through the credit cycle, with healthy capital and liquidity buffers. Fitch Ratings experts noted that LOCKO-Bank profitability remains healthy. Operating profit was 3% of IFRS Basel I risk-weighted assets (RWAs) in 9M2020 (annualised), underpinned by a resilient net interest margin of 6%, strong commission income (25% of operating income) and improved operating efficiency (the cost-to-income ratio moderated to 45% in 9M2020 from 51% in 2019). The release also noted the stability of the bank's funding sources sources during the pandemic and the high level of liquidity with highly liquid assets (cash and equivalents, interbank placements and unpledged bonds) covering 47% of customer accounts at end-11M2020.

LOCKO-Bank in Fitch Ratings:

• LT IDR and LC LT IDR affirmed at 'BB-', Outlook Stable;
• ST IDR affirmed at 'B';
• Viability affirmed at 'bb-';
• Support affirmed at '5';
• Support Floor affirmed at ' NF '.

“The affirmation of LOCKO-Bank's 'BB-' rating with an improved outlook to Stable reflects the international rating agency's view on the quality of the bank's assets in a pandemic environment, the bank's high level of equity and liquidity, and its stable operating profit. LOCKO-Bank is developing, implementing the growth strategy and increasing operational efficiency”