ACRA Europe a.s. (Bratislava, Slovakia) is part of the ACRA Group and is a subsidiary of ACRA (JSC). The agency has been operating in the market since 2001 and has a full range of licenses required to provide rating services in the EU. In July 2012, ACRA Europe became a rating agency registered in the European Union in accordance with the new regulation. Among other things the ratings assigned by ACRA Europe a.s. can be accepted by government agencies as a tool for assessing risks throughout the European Union.
The agency in its release notes a significant expansion of IBEC's activity due to the update of the Bank's development strategy in 2018, as well as the arrival of a new team of highly qualified top managers with international experience in business, banking and finance. The loan portfolio in 2019 grew by almost 125%.
Agency analysts also emphasize that the new Bank team is implementing a policy of diversifying sources of raising capital. Thus, in 2019, IBEC placed a 10-year issue of ruble bonds worth 7 billion rubles, thereby significantly reducing its dependence on short-term financing.
ACRA Europe a.s. draws attention to the Bank’s strong position in terms of capital. So, the core capital adequacy ratio (Tier-1) at the end of 2019 amounted to 50.4%.
The agency considers the risk management quality to be “satisfactory”, due to the Bank’s improved risk management procedures in accordance with the international best practices. According to ACRA Europe a.s., the Bank’s credit risk is mitigated to an extent by the structure of risk distribution (more than half of the loans volume was issued to quasi-sovereign borrowers) and sound backing of its loan portfolio (approximately 75%). The agency also emphasizes that the Bank does not have non-performing loans after the Bank has decided to completely write off all toxic assets in 2018. Nevertheless, analysts of the rating agency indicate a concentration of credit risk, which is relatively high both from the borrowers / issuers / counterparties point of view, and from a geographical point of view.
In assessing the liquidity, ACRA Europe a.s. analytics noted a significant amount of highly liquid assets (more than 10%) and a moderate coverage of short-term liabilities with liquid assets, which in 2019 remained in the range of 1-1.5. This indicates a significant decrease in the Bank’s dependence on short-term financing due to the placement of a bond loan of 7 billion rubles and a noticeable increase in client deposits. Nevertheless, the Bank remains dependent on short-term financing in the form of bank loans, which in 2019 amounted to 38% of all liabilities.
“The Bank continues to expand the range of ratings received. Rating assigned by ACRA Europe a.s. confirms the Bank’s high financial stability and credit quality. The assigned rating will be another positive signal for our European partners and contractors and will contribute to the expansion of business contacts and the development of new areas of cooperation.
At the same time, we are aware of the initiative of the European Securities Market Regulator (ESMA), one of the tasks of which is to increase competition between rating agencies by encouraging issuers to work with small agencies as well. A particularly pleasant fact for us is the location of the agency in the territory of one of our shareholders, Slovakia,” - said Denis Ivanov, Chairman of the IBEC Board.
At present, IBEC has been assigned the following ratings: Moody’s Investor Service - Baa3 with a stable outlook, Fitch Ratings - BBB- with a positive outlook, ACRA (AO) - A- according to the international scale and AAA (RU) with a stable outlook on the national scale.