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25.12.2008
Credit-Rating downgrades FINANCIAL INITIATIVE Bank LLC to uaBB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it downgraded to uaBB from uaBBB the long-term credit rating assigned to Kiev-based FINANCIAL INITIATIVE Commercial Bank LLC (`bank`). Credit-Rating has also downgraded to uaBB from uaBBB the long-term credit rating assigned to bank`s issues of coupon bonds (series A and B) for the amount of UAH50m and UAH250m respectively, with the 5-year original maturity. The rating outlook has been revised to negative. To revise the rating, Credit-Rating considered issuer`s financial statements for 2005-2007 and 9M2008 and its other inside information.
An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is affected by adverse changes in commercial, financial and economic conditions.
Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year, on condition that negative tendencies are retained and current risks are realized.
Factors maintaining the credit rating
- The Bank operates wide-spread branch network, which embraces over 60 outlets (as of Oct. 1, 2008) located in almost all Ukraine`s regions.
- Low specific gravity of NPLs in the bank`s portfolio.
- High Bank`s performance efficiency indicators.
Factors constraining the credit rating
- Delay in bank`s meeting its obligations on series B bonds.
- Decline in bank`s liquidity indicators and bank`s increasing dependency upon the inter-bank market.
- High concentrations in the bank`s loan portfolio, which may negatively affect bank`s liquidity and capitalization.
- High concentrations of bank`s resource base on principal creditors, which make the bank dependant upon financial state of a small number of its customers and raises the liquidity risks.
- Bank`s tending to market risks.
- The Bank`s risk management and business processes require enhancements due to bank`s growing activities.
- Increasing impact of external factors on the financial market and decline in business activities in Ukraine, which negatively affects solvency of Bank`s customers and weighs on value and on liquidity of securitization of the loans granted.
Information on all credit ratings assigned in accordance with the National Rating Scale may be found in REUTERS and BLOOMBERG information systems.
For more information, please contact:
Information and Communication Department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.ua
