IC FINAM gave ordinary shares of bank Revival recommendation to buy, considering their 12-month target price of $ 34.7 per security. Analysts note that the stabilization of the situation in the money market plays in favor of private banks. The attractiveness of Renaissance are enhanced by good capital adequacy, large cushions of liquidity and efficient control over expenditure.

In recent months the situation on the Russian financial market has stabilized. Rising oil prices, low volumes of imports and increasing confidence in the national currency have formed the necessary conditions to increase the Central Bank reserves, capital flight and inflation slowed, and the ruble strengthened. All of this positive impact on the environment MBC. Interest rates on the decline, which offers additional opportunities to attract funding for private banks. In addition, for three months - from February to May - was recorded actual inflow of deposits.

The return of confidence in the financial sector, in particular, expressed by the influx of deposits, reduces the specific risks of private banks' average size. In contrast to the state bank, they are traditionally more sensitive to any signs of macroeconomic instability, which may serve as proof of a sharp outflow of funds from bank customers Revival in October last year , - says the study, the investment company FINAM.

The main risk to the banking system is increasing the proportion of bad debts, which stimulates the development of negative trends in the real sector. In the first quarter of 2009, arrears of bank Revival, which specializes in serving corporate customers of small and medium-sized businesses has increased from 3.4% to 5.9%. Nevertheless, we note that the Bank uses the most stringent criteria to account for bad debts (overdue recognized the entire amount of principal, if the overdue payment of interest and /or part of the debt at least 1 day). According to the forecasts of management, arrears at the end of 2009 will not exceed 9% of the loan portfolio, we maintain a cautious point of view and a 10% level of delay in our assessment model, - notes the analyst IK FINAM Konstantin Romanov .

However, he believes that the Revival relatively comfortably survive the crisis. Taking into account the adequacy of capital at the end of 1 quarter of 2009 to 17,7% (16,9% on average for the sector), the bank has a good margin of safety against a sudden sharp increase in bad debts.

In the present moment FINAM sees no urgent need to raise capital first level, the sufficiency of which is 13.7% at the end of 1 quarter of 2009. By the end of March the bank Revival has formed a large cushion of liquidity accumulated about 30 billion rubles in cash and cash equivalents, representing 22% of assets. As a result, he is able to maintain stability in a complex environment sector. Investment attractiveness of Renaissance increases the effective control of costs. In the first quarter of 2009 the bank adopted a program to reduce them, thereby reducing the transaction costs of 12.5% compared to same period last year.

negative moments for Renaissance is an expected decline in interest margins. To maintain a competitive environment for deposits of individuals forced to significantly increase the bank interest rates that adversely affect the cost of funding in 2009, since more than 80% of liabilities are short-term. We expect that on the basis of 2009 net interest margin would drop to 6, 4% to 6.7% in 2008 - predicts Mr Romanov.

Department of Public Relations and Media Investment Holdings FINAM.
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