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17.07.2007
European Bank for Development and Savings 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 bearing Developing Outlook to Simferopol-based European Bank for Development and Savings OJSC (Bank). In the course of analysis Credit-Rating considered financial statements of European Bank for Development and Savings LLC and of United Commercial Bank OJSC for 2002-9M2006, and the post-merger financial statements of European Bank of Development and Savings OJSC, including of 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 ratings relative status within major categories.
Developing outlook indicates that there is a high possibility for a rating to be changed in the course of the year.
Factors maintaining the credit rating:
- The merger between the European Bank for Development and Savings LLC and the United Commercial Bank OJSC allowed the European Bank for Development and Savings OJSC to significantly expand its branch network in Crimea and its card segment, having boosted its retail segment;
- Diversification of Banks liabilities on creditors, in fact the specific gravity of 20 biggest loans in Banks liabilities amounted to 21.8%;
- The Banks has recently concluded deals on significant raise of its equity, including on attraction of foreign investments which allows the Bank to raise its operations and to upgrade the Banks facilities.
Factors constraining the credit rating:
- Significant specific gravity of negatively classified assets in Banks loan portfolio;
- Unbalanced structure of Banks assets and liabilities by their redemption terms;
- High concentration of Banks loan portfolio on borrowers, in fact the specific gravity of 20 biggest loans makes up over 60% of the Banks loan portfolio;
- High risks imposed by merger of two banks and by reorganization of their management structure.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found in 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
