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23.11.2007
Credit-Rating: Kontrakt Bank`s upcoming bond issue assigned uaBB+
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term credit rating of uaBB+ (uaBB plus) to UAH20m 5-year registered coupon bonds (A series) to be issued by Kontrakt Trade and Financial Bank OJSC (`Bank`). In the course of analysis Credit-Rating considered Bank`s financial statements for 2002-2006 and 1H2007 as well as other inside information furnished by the Bank.
An obligor or a debt liability with uaBB credit rating is characterized with the LOWER THAN SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is strongly affected by adverse changes in commercial, financial and economic conditions. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories.
Factors maintaining the credit rating
- Growth in Bank`s key figures starting from 2003 year-beginning: the assets rose 8x to UAH313.1m as of Jul.1, 2007; the equity grew 2.5x to UAH59m; the liabilities increased 16.3x to UAH254.1m.
- Bank`s information transparency and openness.
Factors constraining the credit rating
- High customer concentrations on both sides of the Bank`s balance sheet, which makes the Bank dependant upon a low number of its customers and increases the liquidity risks.
- The specific gravity of overdue and doubtful debts in the Bank`s customer loan portfolio accounts for 4.62 per cent as of Jul.1, 2007.
- The structure of attracted and placed funds is unbalanced by customer categories.
- Being infant, the Bank`s risk management requires further enhancements.
- Bank`s underdeveloped branch network and card segment, which may hamper achievement of Bank`s strategic goals provided that big systemic banks will further augment their market positions.
Information on all credit ratings assigned in accordance with the National Scale may be found in REUTERS, BLOOMBERG and FTN MONITOR information systems.
For more information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
