Analytical Credit Rating Agency (ACRA) has assigned a credit rating of AA(RU) to Alfa Bank, with a stable outlook.

For the record, this is a second credit rating assigned by the agency (the first one was given National Clearing Center).

As ACRA noted in a press release, Alfa Bank's credit rating is determined by its strong and stable business profile, adequate capital and liquidity positions, and also by the satisfactory assessment of its risk profile. The rating is additionally supported by Alfa Bank's moderate systemical importance in the Russian financial market (Alfa Bank is on the list of systemically important banks according to the Bank of Russia's criteria).

In particular, the agency specified that "the loss absorption buffer (taking into account the placed issue of perpetual bonds worth $400 mln) given the statutory capital adequacy ratio combines with strong possibilities of generating new capital (100-150 basis points) both at the bank and within the group".

As regards the risk profile position, the agency noted that the current level of bad debt which comes from loans overdue by more than 90 days (6.3% as of late June 2016) and a number of loans classified by ACRA as bad ones (roughly 6%, most of which are highly secured) is partly offset by adequate diversification of the credit portfolio (concentration on ten biggest groups of borrowers is 31.5%). The agency points to acceptable concentration of risks (not exceeding core capital) associated with lending of high-risk industries and bank-related businesses.

As for liquidity, in ACRA's baseline scenario the bank withstood an outflow of customer funds with a solid reserve, and in the stress scenario the liquidity deficit is at a medium market level, the press release runs. The agency also noted that the high share of check accounts in liabilities (51.5% of client funds) has helped Alfa Bank reduce funding costs compared to the peers.