OREANDA-NEWS. RusRating has lowered the credit rating of OOO Life Factoring Company from "BBB"  to “B-“ on the national scale and from "BB" to “CCC” on the international scale, in both cases with a stable outlook.

The rating cut reflects a high probability of reduced business activity following the withdrawal of ProbusinessBank’s banking license, as well as the associated loss of friendly funding sources.

The rating is based on healthy earnings and a highly-diversified factoring portfolio of good quality.

Constraining factors include relatively modest capital adequacy, a small market share in large-scale factoring deals, a likely decline in the client base, and potential difficulties in accessing funding from unaffiliated banks (those not members of the LIFE group).

About the Company

Life Factoring Company specialises in the provision of factoring services to small and mid-sized enterprises, in some cases via partnerships with state-owned SME Bank under federal government SME support programmes. The Company belongs to the LIFE Group headed by ProbusinessBank; that bank’s senior managers are its ultimate beneficiary owners.

Capital adequacy is low. External liabilities consist mainly of bank loans, with LIFE group resources accounting for a third of the total. Asset quality is healthy, thanks mainly to a well-diversified factoring portfolio with a moderate delinquency ratio and high percentage of recourse contracts. Earnings performance is healthy. Liquidity is sufficient. Risk sensitivity is high.