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IBI-Rating has affirmed the rating of bank deposit reliability of "MOTOR BANK" PJSC at 4 grade

29.12.2015
IBI-Rating informs on the affirmation of the rating of bank deposit reliability of "MOTOR BANK" PJSC at 4 grade (high reliability).

Rating of bank deposit reliability at grade 4 indicates that the financial institution is reliable, pays its obligations timely within the requirements established by the current legislation of Ukraine, including those of the National Bank of Ukraine. The problems with a timely return of deposits are unlikely to arise, although there is a certain dependence of the financial institution on the impact of external and internal factors. The impact assessment of external factors does not apply to the situations involving force majeure circumstances. The affirmation of grade rating is due to the Bank’s maintaining of a high level of capitalization. "MOTOR BANK" PJSC meets its obligations to creditors in a timely manner and in full. The amount of highly liquid assets remains at a high level, and their quality is good. The actual values of liquidity ratios significantly exceed the minimum allowed values, established by the NBU. However, the Bank's existing dependence on its major corporate customers may put pressure on the Banks' liquidity.

During the analyzed period, the Bank remained dependent on the financial condition of a small number of borrowers, which increased the Bank’s vulnerability to credit risk. Also, the impact on the sensitivity to financial risks may increase as a result of persistence of adverse trends in the economy and reduced solvency of borrowers. The amounts due to customers remain the main component of the resource base, which are formed by the funds of the corporate customers upon demand, which is caused by the specifics of activities of the associated companies servicing the Bank. However, since a part of these funds is stable, the Bank places these funds in profitable assets, thereby increasing the amount of net interest income. However, this structure of liabilities results in the significant concentration of the Bank's resource base by major creditors, which constrains the financial flexibility and increases the Bank's vulnerability to liquidity risk.

During the analyzed period, activities of "MOTOR BANK" PJSC remained profitable and performance indicators improved significantly due to the increase in net profit.

IBI-Rating sees positive changes in the Bank's operations and its financial results (increased profitability, growth of performance indicators), which along with the improvement in the asset quality and diversification of the resource base, may lead to a change of the outlook or review of the rating grade. Downgrading of the rating of bank deposit reliability is possible in the event of worsening of the Bank’s solvency (liquidity); growth of credit risk due to deterioration of servicing of the granted loans and decline in quality of the securities portfolio, as well as deterioration of the political and economic situation in the country.

In order to perform the analytical research the materials provided by "MOTOR BANK" PJSC were used, including the annual financial statements for 2011-2014 and 9 months of 2015, target performance indicators for 2016, other necessary internal information, as well as the information from the public sources, which the Rating agency considers reliable.

Finance department
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua