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S&P: Russian National Factoring Company Outlook Now Pos; Nat'l Scale Rating Raised to 'ruBBB+'

February 05, 2008 | Сbonds

MOSCOW (Standard & Poor's) Feb. 4, 2008--Standard & Poor's Ratings Services said today that it revised its outlook on Russian bank National Factoring Company (NFC) to positive from stable. At the same time, the Russia national scale rating was raised to 'ruBBB+' from 'ruBBB'. At the same time, the 'B-' long-term and 'C' short-term counterparty credit ratings were affirmed.

"The outlook revision and national scale upgrade reflect the bank's ongoing improving diversification of clientele, products, and geographic presence," said Standard & Poor's credit analyst Elena Romanova.

NFC's continuing to build a longer track record of adequate capitalization and asset quality also benefits the outlook. Moreover the bank's improving risk management function is strengthening risk control and enhancing the risk-reward balance.

The ratings reflect NFC's limited business and customer profile, a concentrated, vulnerable short-term funding base; earnings, challenged by squeezing interest margins and higher network costs; and its relatively small asset size in both the Russian and global context.

Supporting the ratings are NFC's well-recognized brand and good market position in the fast-developing, niche factoring sector; focused strategy, with a committed, experienced management team; adequate capitalization and asset quality; and improving diversification of clientele, products, and geographic presence.

"We expect NFC to expand its business in line with its strategic objectives, while further diversifying its business profile and maintaining adequate capitalization and asset quality," said Ms. Romanova.

The ratings already incorporate funding and customer diversification in the medium term; hence, any potential upgrade depends on NFC's ability to strengthen its stand-alone credit and funding profile and continue to build a track record of adequate capitalization, asset quality, and profitability.

The ratings could be lowered or the outlook revised back to stable, or even negative, if NFC's growth slows, or if its financial and credit profile markedly deteriorates. The ratings or outlook could also come under pressure if market conditions worsen, leading to a decline in core performance and an accumulation of risks in the factoring portfolio.

Company: NFC JSC

Full company nameNational Factoring Company (Joint-Stock Company)
Country of riskRussia
Country of registrationRussia


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