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06.07.2007
Ukrainian Business Bank assigned uaBBB- credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBBB- (uaBBB minus) long-term credit rating to Donetsk-based Ukrainian Business Bank (`Bank`). In the course of analysis Credit-Rating considered Bank`s financial statements for 2002-2006 and 1Q2007 as well as other inside information furnished by the Bank.
A credit rating of uaBBB is an investment grade rating, indicating an ADEQUATE CAPACITY of an obligor to pay both interest and principal on the given debt liability in the Ukrainian financial market environment. This rating indicates a level of creditworthiness that is more susceptible to adverse changes in commercial, financial and economic conditions than debt obligations with higher investment grade ratings. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories.
Factors maintaining the credit rating
- Growth in Bank`s major assets and liabilities has been proportional and balanced with the retained upward trend in profitability.
- Diversification of the Bank`s resource basis on major creditors, in fact the specific gravity of 10 biggest deposits amounted to 19% of the deposit portfolio as of Apr. 1, 2007.
Factors constraining the credit rating
- Unbalanced terms of redemption of the Bank`s assets and liabilities.
- Low assets and stock profitability in 2006 in comparison with the banking system coupled with the Bank`s vulnerability to rates risks (the indicator of the net rate is much lower than that average of the banking system).
- High concentration of Bank`s loan portfolio on borrowers, in fact 20 biggest loans take over 50% of the client loan portfolio as of Apr. 1, 2007.
- Bank`s exposure to loss of its market share provided that big national banks would increase their share on the market.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found in the REUTERS, BLOOMBERG and FTN MONITOR information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
