"Binbank": reliability rating. "Binbank" in the rating of Russian banks

"Binbank" was established in 1993 as a captive bank and is now a medium-sized commercial financial institution that has a branch network in many Russian regions. In 2014, its net income increased fivefold, reaching net income of over 69 million dollars (more than 3.9 billion rubles). The rating of "Binbank" for reliability, according to the Central Bank, is the 20th place with the amount of assets of 413.2 billion rubles.

Rapid growth

"Binbank" the last decade is rapidly developing, stepping out of the chain of medium-sized banks in the first Russian twenty. Especially rich was the crisis for many in 2014. The financial institution has acquired several assets, including Binbank Credit Cards (former Moscomprivatbank), Binbank Murmansk (formerly DNB Bank) and ROST banks. And 55% of the assets in the total share was provided by Binbank itself. The rating of the organization as a result has considerably increased.

The acquisition of assets contributed to the diversification of the client base, increasing business diversification and improving the position of the consolidated group by asset size: according to this indicator, the bank ranks seventh in the all-Russian rating (as of 04/01/2015), a year earlier - only 40th.

Rating of banks: "Binbank"

The economic crisis markedly shuffled the pack of Russian financial institutions. If some of them required serious state support, then Binbank, on the contrary, strengthened its position. Moreover, the influential portal Banki.ru thanks to the rapid success of this particular organization recognized it as the bank of the year 2014. It outstripped recognized grants. Among them are Sberbank, VTB, Gazprombank and other partners.

Foreign experts also noted "Binbank". The rating of analysts from Standard & Poor's corresponds to the rank "B". This is a good indicator for large Russian banks, reflecting both the strength and certain risks inherent in regional economies. Other indicators:

• 3 rd place among the most reliable commercial banks of the Russian Federation (1.04.2015).
• The 10th for profitability (1.04.2015).
• 18th in the rating of "Interfax-100" (1st quarter of 2015).
• The 27th in terms of equity (1.04.2015).

Forecasts of analysts

The acquisition of significant assets, observed over the past year, imposes certain risks. Banking analysts note that the strategy of "Binbank" is opportunistic and at the same time aggressive. It may be subject to high integration risks, taking into account the significant amount of assets acquired and plans for further expansion of business in unfavorable operational conditions for banks in Russia today. Meanwhile, disparate structures within the group can sufficiently complement each other and form an organization that will become a strong market player with a long-term sustainable business model and a stronger ability to generate profits.

A positive factor is that the acquired assets correspond to the long-term strategy of strengthening the market position of "Binbank" in the retail segment and diversifying the business profile. Due to recently acquired assets, the position of the company in the segment of retail deposits of customers has improved. As of 04/01/2015, "Binbank" ranked 7th in the rating of the banks of Russia in this indicator. In addition, the company was able to enter the market of several important Russian regions. In the future, the branch network will have 450 sales points in more than 60 regions by the end of 2015 after the planned closure of inefficient branches.

Reliability rating

IA BankStars, based on the results of the rapid analysis of financial statements, assigned PJSC "Binbank" a reliability rating "satisfactory". According to BankStars, this institution is characterized by a moderate risk of default to its creditors and depositors. However, the bank's stability is sensitive to the unfavorable development of the situation.

Liquidity

Based on the analysis of the balance sheet structure of PJSC Binbank, the BankStars rating of liquidity was rated as moderately high. The conclusions are based on the volatility of funds in deposits and on the bank's settlement accounts and a group of banks similar in terms of assets. The company is able to ensure the timely execution of repayment obligations on loans, deposits in the event of implementation of a possible stress scenario.

Capitalization

By 2014, the level of the capitalization of the financial group has been raised to 13.05% due to the increase in equity capital, while the volume of assets of PJSC "Binbank" has decreased. The rating of the ability to compensate for possible losses in case of realization of stress scenarios by own means is estimated as moderately high.

Quality of the loan portfolio

According to the accounts, the volumes of overdue loan liabilities of "Binbank" as of 01.01.2014 amounted to 3623.61 million rubles. (2.63% of the loan portfolio), increasing in December 2013 by 189.61 million rubles. Reserves for possible losses increased by 156.14 million rubles. And amounted to 5752.92 million rubles as of the reporting date. (4.17% of the loan portfolio). The reserves created by the bank for possible losses on loans cover the current overdue loan debt with a coefficient of 1.59. At the reporting date, the loan portfolio is characterized by a slightly smaller share.

Growth Factors

The following factors influence the ranking of "Binbank" among competitors / partners.

Positive:

• An increase in the customer base and a growing market share;
• Strong support in the form of capital injections from shareholders;
• Diversification of the resource base.

Negative:

• High exposure to integration risks associated with assets acquired in 2014, and aggressive growth strategy;
• Weak profitability indicators from core activities, mainly due to weak indicators of the portfolio of unsecured retail loans at high risk;
• A slowdown in macroeconomic growth and unfavorable operating conditions for all Russian banks.

Main shareholders

It is expected that the main shareholders - MO Shishkhanov and MS Gutseriev - will support the development of Binbank and will provide sufficient capital to achieve large-scale growth goals. In 2011-2014, they made regular injections into the capital: 16.3 billion rubles in tier 1 capital and 3.9 billion rubles in tier 2 capital.

Assets owned by Shishkhanov and Gutseriev in non-banking sectors, in general, supplement the business of Binbank. In particular, pension funds and insurance companies owned by the financier Shishkhanov can provide a synergy effect, offering clients a comprehensive service, allowing them to increase their customer base.

Capitalization and profitability of PJSC "Binbank"

The credit rating for capitalization and profitability is characterized as moderate. Capitalization is provided mainly by capital injections of shareholders. The assessment of indicators as moderate is based on calculations that the RAC coefficient without adjustments for diversification and concentration risks will be about 5.1% in the next 18-24 months. This forecast is determined by the following expectations:

• The increase in assets by 34% in 2015 due to the consolidation of the banks of the GROUP and BIN Bank Murmansk (14%), as well as organic growth (20%).
• The infusion of capital in the amount of 10 billion rubles. In 2015, despite the fact that 6 billion rubles have already been received in April.
• The capital increase (1.5 billion rubles) as a result of the issuance of new securities for the consolidation of Binbank Murmansk.
• Capital gains due to the initial recognition of the assets of the banks of the GROUP.
• Reduction of net interest margin from 4.3% in 2014 to 4% in 2015 due to increased costs for funding and increased competition in the Russian banking sector.
• The cost of forming reserves is about 3.5% in 2015-2016 compared to 2.1% in 2012-2014 (the average) due to the deterioration of the overall economic situation.

Prospects

In 2014, Binbank's access to reliable corporate clients has improved. It is a private financial institution, therefore sanctions of US and EU regulators are not applied to it (unlike large Russian state-owned banks). In addition, the growing size of Binbank allowed it to serve larger customers. As a result, the company attracted a number of private and public corporations as borrowers and investors, which led to the strengthening of its client base. The risks of lending to related parties are estimated as moderate: loans to related parties accounted for about 2.6% of the loan portfolio (December 31, 2014).

In the period 2015-2016. Binbank's weak earnings from its core business are projected due to expected weak performance in the segments of unsecured retail loans and credit cards. The operating profit in 2014 was negative as a result of significant expenses for the formation of reserves of Binbank Credit Cards JSC, acquired last year.

A positive factor - the regulatory capital of Binbank is supported by a subordinated loan of 12.7 billion rubles. As of April 1, 2015, the capital adequacy ratio of the organization was 13.2%, which is significantly higher than the minimum level of 10% set by the regulator.