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31.07.2007
Bank for Regional Development 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 Kiev-based Bank for Regional Development Joint-Stock Bank (Bank). In the course of analysis Credit-Rating considered Bank's financial statements for 2003-2006 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 ratings relative status within major categories.
Factors maintaining the credit rating:
- Growth in Bank's major groups of assets and liabilities has been proportional and balanced, with the positive profitability trends being retained;
- The specific gravity of overdue and doubtful debts in Bank's client loan portfolio amounted to 0.78% as of Apr. 1, 2007;
- The majority of Bank's performance indicators are on adequate level for the national banking system.
Factors constraining the credit rating:
- Low Bank's capitalization (the H2 standard made up 10.32% as of Apr. 1, 2007, with the second half 2007 expecting UAH20m raise in the Bank's authorized stock) coupled with the growth in the Bank's assets exceeding growth rates of the Bank's equity;
- High concentration of the Bank's loan portfolio and of resource basis on major counterparts (over 47% of the loan portfolio accounts for 20 biggest borrowers with the 41% of the Bank's liabilities accounting for 20 biggest creditors);
- Bank's exposure to loss of its market share provided that big systemic 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 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
