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IBI-Rating has affirmed the rating of bank deposit reliability of «BM BANK» JSC at 4+ grade (high reliability)

23.09.2016
IBI-Rating informs on affirming of the rating of bank deposit reliability of «BM BANK» JSC 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 NBU. The problems with a timely return of deposits are unlikely to arise, although there is 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 affirmed rating grade of «BM BANK» JSC is due to its acceptable capitalization and liquidity ratios, as well as good diversification of the customer deposit portfolio by major depositors. The Bank meets its obligations to creditors in a timely manner and in full volume. At the same time, the Rating agency notes the Bank’s dependence on the parent structure and constraints on the increasing of capitalization, because of the sanctions applied against some companies of the Russian Federation (including the main shareholder of the Bank).

The Bank’s dependence on the financial condition of a small number of borrowers remains, which increases vulnerability of the Bank to credit risk. The amount of overdue debt has grown significantly. Also, the Bank’s vulnerability to currency risk increases as a result of the considerable volume of foreign currency denominated loans granted to the borrowers who have no sources of foreign exchange earnings.

Given the formation of a significant amount of loan loss reserves for the outstanding loans of customers, the Bank's activities by the results of І half year of 2016 were unprofitable. Accordingly, performance indicators remained at a low level. In its turn, the Rating agency IBI-Rating notes the owner’s support by involving his funds in the form of long-term inter-bank loans and subordinated debt.

IBI-Rating currently sees no factors, which may lead to a change in the grade of the Bank's rating of bank deposit reliability in the short term. The following factors may have an impact on the grade of the Bank's rating of bank deposit reliability: a decline of the Bank’s solvency (liquidity), increased credit risks due to deterioration of servicing of the granted loans, increased vulnerability of the Bank to market risks, increased unprofitability, as well as deterioration of the political and economic situation in the country.

In order to conduct the analytical research the materials provided by «BM BANK» JSC have been used, including: annual financial statements for 2013-2015 and 6 months of 2016 , target performance indicators for 2016, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

Financial Department.
For additional information please contact:
Press office of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua