IBI-Rating has affirmed credit rating of «BM BANK», PJSC at uaBBB+ grade

Rating agency IBI-Rating informs on affirming of the credit rating of «BM BANK», PJSC at uaBBB+ grade with a «negative» outlook. The rating of bank deposit reliability has been affirmed at «4+» grade (high reliability).

«BM BANK», PJSC was registered in December 2005. The main shareholder of the banking institution is the Russian bank - Joint Stock Company «BM Bank», whose share in the authorized capital accounts for 99.99%. The Head office of «BM BANK», PJSC is located at the address: 37/122 Taras Shevchenko boulevard, Kyiv city. As of the end of the first half of current year the Bank was represented by 17 branches in 14 regions of Ukraine.

Through the shareholder’s additional contributions the authorized capital increased from UAH 1.63 bln. to the amount of UAH 3.28 bln. In turn, given the substantial losses of previous years, the regulatory capital as at the beginning of July 2017 amounted to UAH 308 mln. That is that the capital adequacy is sufficient – the actual value of the N2 ratio exceeds more than 2.5-fold the limit value established by the regulator. During the period under review, liquidity ratios were implemented with the reserve sufficient enough to level off the current liquidity risks. Significant reserves formed for active operations in the last few years, as well as a negative result produced from trading operations (due to the deterioration in the quality of debt servicing for the main borrowers) have led to significant losses generated by «BM BANK», PJSC. Thus, by results of 2016, the negative financial result of the bank amounted to UAH 1.76 bln. The damage for the first half of 2017 was UAH 59.25 mln.

The Bank’s ratings are supported by acceptable capitalization ratios, good diversification of the customer deposit portfolio by major depositors, as well as high liquidity ratios. At the same time, the Bank’s sensitivity to credit and currency risks remains, which is caused by concentration of the customer loan portfolio by major borrowers and a significant proportion of foreign currency denominated loans. The Rating agency notes a low quality of the assets, significant loss of previous and this years, low performance indicators, as well as a persisting difficult situation in the economy, which limits financial capabilities of the population and enterprises of the real sector, affecting adversely the level of confidence to banking institutions. Keeping of the credit rating on the Credit Watch List is due to the entry into force of the Decision of the National Security and Defense Council of Ukraine, taken on 15 March 2017, on «Personal Special Economic and Other Restrictive Measures (Sanctions)» with regard to Ukrainian banks with the Russian state capital.

In order to conduct the analytical research the materials provided by «BM BANK», PJSC have been used, including: annual financial statements for 2014-2016 and I half-year of 2017, target performance indicators, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

Financial Department
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