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21.03.2007
Upcoming bond issue by «Eastern Industrial Commercial Bank» assigned uaBB+ (uaBB plus) credit rating
"Credit-Rating", a nationally recognized credit rating agency in Ukraine has today announced the assignment of the uaBB+ (uaBB plus) long-term credit rating to the upcoming issue of registered coupon bonds (D series) by Lugansk-based "Eastern Industrial Commercial Bank" ("the Bank") LLC for the amount of UAH 5m with the 5-year original maturity. In the course of analysis the agency used Issuer`s financial statements for 2001-2005 and 10M2006 as well as other inside information, furnished by the Bank.
Issues rated uaBB are the least affected by the risk of non-payment of the principal and interest within the speculative grade. The obligor, however, may be impaired to timely and in full meet its commitments on the obligation in the Ukrainian financial market environment in the event of adverse changes in business, financial and economic conditions. However, the possibility of non-payment is low in the near future. The "+" and "-" modifiers denote rating`s relative status within major categories.
Factors maintaining the credit rating
- High quality of assets and profitability, specifically the ROA amounted to 2.65% as of 1 Jan. 2007 (1.22% is average of the national banking system).
- High liquidity and capitalization, in fact the short-term liquidity amounted to 52.93%, the securitization of credit risks` with equity amounted to 38.75% (36.99% and 14.1% are the weighted average of the national banking system respectively).
Factors constraining the credit rating
- High concentration of credit and deposit portfolios, specifically as of 1 Oct. 2006 47.5% of the credit portfolio is taken by 10 biggest credits (which covers 110.8% of the equity), with the 8 biggest deposits taking 34.3% of the deposit portfolio.
- Risks of loss in Bank`s market share on condition that the large national banks continue to increase their presence in Lugansk regional market.
- Further Bank`s development is dependant upon social and economic development of Lugansk Oblast.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found in the REUTERS and BLOOMBERG information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
