Commerzbank EM Credit Notes - Renaissance Credit
September 20, 2011 Commerzbank
Commercial bank Renaissance Capital known as Renaissance Credit recently reported consolidated H1 2011 IFRS financial statements. The results reflect positive balance sheet dynamics and improving financial indicators. Renaissance Credit is aiming to rebuild its loan book to pre-crisis levels focussing on higher-yield, albeit riskier products. During the H1 2011 Renaissance reported strong revenue growth and solid margins and has managed to strengthen customer deposits, which now comprise the core of its funding base; however, its overall cost of risk remains high. Despite some progress the bank’s provisioning coverage is low although its strong capitalisation provides adequate loss absorption capacity. Renaissance Credit’s 2013 eurobond went through a very active sell-off in early August on the back of the overall melt down. The bond currently offers a yield to maturity of more than 13%, which may be of interest to risk-inclined investors; however, the bid/offer spreads are very wide which limits the opportunity to sell the bond without loss. We also do not rule out the risk of further price declines should the overall market conditions deteriorate.
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Company — Renaissance Capital
Full nameRenaissance Capital