The credit rating of LLC CB “GT bank” (hereinafter, GT bank or the Bank) is based on the Bank’s moderately low business profile assessment, strong capital adequacy, critical risk profile assessment, and adequate funding and liquidity position.
GT Bank is a small credit institution that operates mainly in the Krasnodar Krai. The Bank’s core activities are corporate lending, in particular to companies providing utilities services, and raising funds from individuals.
KEY ASSESSMENT FACTORS
The moderately low business profile assessment (bb-) reflects the Bank’s relatively low share in the Russian financial services market. At the regional level, however, the Bank holds adequate market positions and has a stable base of borrowers and depositors.
The Bank’s operating income diversification is assessed as medium. The Herfindahl–Hirschman Index amounted to 0.29 at the end of 2024. The main sources of income were interest income from funds held in credit institutions and from funds lent to corporate borrowers.
The Bank’s strategy provides for growth of its loan portfolio, resource base, and capital. In terms of active operations, GT bank aims to retain its focus on corporate lending. The Bank also intends to develop its line of commission products for legal entities in order to increase non-interest revenues and further diversify the structure of its liabilities.
ACRA assesses the Bank’s capital adequacy as strong. The Bank has sufficient funds to withstand an increase in the cost of risk over 500 bps without violating the N1.2 ratio, which amounted to 25.5% as of February 1, 2025. The ability to generate capital, calculated for five years and taking into account 2024 performance, is adequate. The Bank’s operational efficiency, which is assessed as the combination of the net interest margin (NIM) and the ratio of costs to income (CTI), calculated for the past three years, is comparable to those demonstrated by peers.
Critical risk profile assessment. In 2024, the Bank rapidly increased its lending operations, focusing on corporate clients, while simultaneously developing leasing and factoring business. Thanks to considerable growth of the loan portfolio and productive work with problematic borrowers, the share of non-performing and potential non-performing debt was less than 10% of the portfolio. Nevertheless, in the Agency’s opinion, sharp growth of lending (over the past 15 months, the portfolio has more than doubled) may give rise to additional risks in the short term and medium term, which has a negative impact on the overall assessment of the factor. Concentration on the 10 largest groups of related borrowers remains heightened. The presence of non-core assets on the balance sheet received by the Bank as compensation from borrowers also has a certain negative impact on the risk profile assessment. GT bank is selling these assets, but their share is still significant. ACRA assesses the risk management quality as satisfactory.
Adequate funding and liquidity position. The Bank has a sufficient buffer of liquid assets allowing it to withstand a substantial outflow of client funds both in ACRA’s base case and stress scenarios on a 90-day horizon. The long-term liquidity shortage indicator (LTLSI) corresponds to a strong assessment.
ACRA notes the Bank’s work to diversify its funding sources, the result of which pressure exerted by the growth of concentration of borrowings from major groups if clients is offset.
key assumptions
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Maintaining the current strategy and business model within the 12 to 18-month horizon;
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Maintaining N1.2 above 12% within the 12 to 18-month horizon;
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Cost of credit risk at 2–4%.
potential outlook or rating change factors
The Stable outlook assumes that the rating will highly likely stay unchanged within the 12 to 18-month horizon.
A positive rating action may be prompted by:
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Further decline in the level of problem loans taking into account growth of lending;
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Lower concentration of the loan portfolio on the 10 largest groups of borrowers;
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Decline of non-core assets on the Bank’s balance sheet.
A negative rating action may be prompted by:
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N1.2 falling below 12%;
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Lower business profitability;
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Deterioration in liquidity position;
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Lower diversification of funding sources.
rating components
Standalone creditworthiness assessment (SCA): bb-.
Adjustments: none.
Support: none.
issue ratings
There are no outstanding issues.
regulatory disclosure
The credit rating has been assigned under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Banks and Bank Groups under the National Scale for the Russian Federation and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating of LLC CB “GT bank” was published by ACRA for the first time on May 17, 2019. The credit rating and its outlook are expected to be revised within one year following the publication date of this press release.
The credit rating was assigned based on data provided by LLC CB “GT bank”, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the IFRS financial statements of LLC CB “GT bank” and the financial statements of LLC CB “GT bank” drawn up in compliance with the requirements of the Bank of Russia. The credit rating is solicited and LLC CB “GT bank” participated in its assignment.
In assigning the credit rating, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided additional services to LLC CB “GT bank”. No conflicts of interest were discovered in the course of credit rating assignment.
