LONDON, July 20 (Itar-Tass) — Fitch Ratings has raised long-term credit rating of Russia’s Alfa-Bank to BB +. The corresponding report was released on global markets on Tuesday.
The agency set the credit outlook of Alfa-Bank to “stable.”
The agency analysts said in a commentary that the current raising of the rating is the result of significant qualitative improvement of the bank’s assets, as well as impressive work results.
Alfa-Banking Group has maintained its position as the top Russian private bank by total assets, total equity and customer accounts, according to the bank’s website.
Founded in 1990, Alfa-Banking Group offers a wide range of products and operates in all sectors of the financial market, including corporate and retail lending, deposits, payment and account services, foreign exchange operations, cash handling services, custody services, investment banking and other ancillary services to corporate and retail customers.
The corporate and retail client base has grown considerably during the last several years — by the end of 2010, Alfa-Banking Group served over 40 000 active corporate customers and 5.3 million retail clients, while the branch network extended to 364 offices across Russia and abroad, including a subsidiary bank in the Netherlands and financial subsidiaries in the United States, the United Kingdom and Cyprus.
Net profit of the Alfa-Banking Group for the period amounted to USD 553 million (2009 — USD 77 million) and is the highest recorded profit in the 20-year history of Alfa Banking Group, representing a 19.1 percent return on average equity. Total equity increased by 14.1 percent to USD 3.1 billion net of a USD 150 million dividend. Alfa Banking Group maintained a high capital adequacy ratio of 18.2 percent as of December 31, 2010 (December 31, 2009 — 20.2 percent).
In the reporting period Alfa Banking Group recorded an increase of its total assets of 31.6 percent from USD 21.6 billion at the end of 2009 to USD 28.5 billion at December 31, 2010, reflecting strong macroeconomic recovery and the ability of Alfa-Bank to attract new customers in both the corporate and retail segments.
The key factors driving profitability were a 21.6 percent increase of net margin (from USD 1.1 billion in 2009 to USD 1.3 billion in 2010), a 24.3 percent increase of net fee and commission income (from USD 255 million in 2009 to USD 317 million in 2010), increases in net income from investments and foreign currency transactions and a reduction of provisions for loan impairment. In addition the retail business unit recorded positive profit before tax for the first time, in the amount of USD 208 million.