IBI-Rating has affirmed the credit rating of PJSC «BANK CREDIT DNEPR» at uaA- grade, with a «positive» outlook

Rating agency IBI-Rating informs on affirming of the credit rating of PJSC «BANK CREDIT DNEPR» at uaA- grade, the rating outlook has been upgraded to «positive». The rating of bank deposit reliability of PJSC «BANK CREDIT DNEPR» has been affirmed at «4+» grade (high reliability).

PJSC «BANK CREDIT DNEPR» has been operating in the banking market since July 1993. According to the classification of the National Bank of Ukraine, the Bank is in the group of banks with private capital (as per criteria for allocating banks to groups in 2017) and, as at the beginning of October 2017, ranked the 22nd by assets among the 88 solvent banks of Ukraine. 100% of major shareholding in PJSC «BANK CREDIT DNEPR» is owned by Mr. Viktor Pinchuk. The Bank's regional network is represented by 42 branches in 10 oblasts of Ukraine. The bank has a rather large customer base, as well as a developed infrastructure of card business services. The Bank is one of the agent banks of the Deposit Guarantee Fund on payment of compensation to customers of insolvent financial institutions. In two years, the Bank has paid compensations to customers of more than ten bankrupt financial institutions. During the current year, the Bank began to actively develop hryvnia retail and Agro SME lending, which helped to improve the quality of assets and reduce credit and currency risk.

The affirmed ratings of PJSC «BANK CREDIT DNEPR» with changing of credit rating outlook to «positive» is due to acceptable diversification of the resource base, the existing developed regional network and card business, which contributes to increasing of the customer base and strengthening of positions in the banking market; as well as financial support from the Bank’s owner. Thus, on the third quarter of this year, the Shareholder was transferred funds to increase the authorized capital in the amount of USD 1.2 b. At present, funds are accounted for in the account of contributions for unregistered authorized capital, the process of approval of registration of capital increase with the regulator is continues. Also, the Shareholder concluded a surety agreement with the Bank, under which the Shareholder accepted the obligation to guarantee the execution of problem debtors of the Bank under loan agreements in the amount of USD 9.8 million, and placed in the bank the appropriate amount of money coverage. The Shareholder intends to increase the amount of coverage to USD 15m before the end of the year and convert these guarantee deposits into the authorized capital of the institution during the next issue of shares in 2018.

At the same time, the Rating agency notes preservation of significant concentration of the customer loan portfolio by major borrowers, a significant proportion of overdue debt on customer loans, as well as an incomplete balance between assets and liabilities by maturity. In turn, it should be noted that the Bank has a significant amount of sufficiently stable funds attracted from the companies, which are recognized as related to the Bank, in accordance with the requirements of the regulatory acts of the NBU, having a positive impact on the state of liquidity of the institution.

According to the results of 9 months of 2017, the the financial result of PJSC «BANK CREDIT DNEPR» was unprofitable due to the significant amount of funds allocated for the formation of reserves for active operations. As a result, the key performance indicators remain low, but comply with the NBU's Plan of Measures to eliminate violations of the Bank's economic standards and demonstrate improvements. Thus, according to the results of January-September 2017, net interest income had a positive value (UAH 92 m) and contributed to the growth of net operating income from operating activities up to the amount of UAH 247.7 m (versus UAH 53 m for the 9 months of the previous year).

In order to conduct the analytical research the materials provided by PJSC «BANK CREDIT DNEPR» have been used, including: annual financial statements for 2014-2016 and 9 months of 2017, target performance indicators, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

Finance department
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