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IBI-Rating has affirmed the rating of bank deposit reliability of «BANK CREDIT DNIPRO» PJSC at 4+ grade (high reliability)
05.10.2016
Rating agency IBI-Rating informs on affirming of the rating of bank deposit reliability of «BANK CREDIT DNIPRO» PJSC at «4 +» (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 (hereinafter – 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 grade of the rating bank deposit reliability of «BANK CREDIT DNIPRO» PJSC is due to the Bank’s meeting its obligations to creditors in a timely manner and in full. The amount of highly liquid assets is at the sufficient level. The Bank's dependence on major corporate clients both in the resource base, and in the structure of assets, may put pressure on the Bank's liquidity, increasing its vulnerability to certain financial risks. At the same time, the Bank disposes of a significant amount of relatively stable funds, attracted from the companies, which are recognized as related according to normative legal acts of the NBU, positively affecting the Bank’s liquidity. Amounts due to customers, which are formed mainly by funds of individuals, as well as funds of related companies and other corporate customers, remain the main component of the resource base. Due to the accumulated sufficient level of liquidity, the Bank has repaid ahead of schedule the stabilization loan of the NBU.
The Rating agency notes a significant amount of overdue debt on the customer loan portfolio of «BANK CREDIT DNIPRO» PJSC, while the reserve coverage of the loan portfolio is over 30%. In addition, the Bank may be sensitive to foreign currency risk because of the significant amount of foreign currency denominated loans, and the lack of foreign exchange earnings of individual borrowers may adversely affect certain financial indicators. Persisting negative trends in the economy and the unstable situation in the country increases sensitivity of banking institutions (including «BANK CREDIT DNIPRO» PJSC) to certain financial risks.
Despite the loss in the financial statements of «BANK CREDIT DNIPRO» PJSC incurred during the period under review, including as a result of channeling of a significant amount of funds on formation of reserves for active operations, and low performance indicators, the Bank fulfills the Action Plan approved by the NBU on elimination of violations of the Bank’s economic ratios, which envisages attaining profitable activities by the end of 2017.
IBI-Rating currently sees no factors that may lead to upgrading of the Bank’s rating of bank deposit reliability in the short term. Downgrading of the rating of bank deposit reliability is possible in the event of worsening 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 «BANK CREDIT DNIPRO» PJSC have been used, including: annual financial statements for 2013-2015 and 8 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
The affirmed grade of the rating bank deposit reliability of «BANK CREDIT DNIPRO» PJSC is due to the Bank’s meeting its obligations to creditors in a timely manner and in full. The amount of highly liquid assets is at the sufficient level. The Bank's dependence on major corporate clients both in the resource base, and in the structure of assets, may put pressure on the Bank's liquidity, increasing its vulnerability to certain financial risks. At the same time, the Bank disposes of a significant amount of relatively stable funds, attracted from the companies, which are recognized as related according to normative legal acts of the NBU, positively affecting the Bank’s liquidity. Amounts due to customers, which are formed mainly by funds of individuals, as well as funds of related companies and other corporate customers, remain the main component of the resource base. Due to the accumulated sufficient level of liquidity, the Bank has repaid ahead of schedule the stabilization loan of the NBU.
The Rating agency notes a significant amount of overdue debt on the customer loan portfolio of «BANK CREDIT DNIPRO» PJSC, while the reserve coverage of the loan portfolio is over 30%. In addition, the Bank may be sensitive to foreign currency risk because of the significant amount of foreign currency denominated loans, and the lack of foreign exchange earnings of individual borrowers may adversely affect certain financial indicators. Persisting negative trends in the economy and the unstable situation in the country increases sensitivity of banking institutions (including «BANK CREDIT DNIPRO» PJSC) to certain financial risks.
Despite the loss in the financial statements of «BANK CREDIT DNIPRO» PJSC incurred during the period under review, including as a result of channeling of a significant amount of funds on formation of reserves for active operations, and low performance indicators, the Bank fulfills the Action Plan approved by the NBU on elimination of violations of the Bank’s economic ratios, which envisages attaining profitable activities by the end of 2017.
IBI-Rating currently sees no factors that may lead to upgrading of the Bank’s rating of bank deposit reliability in the short term. Downgrading of the rating of bank deposit reliability is possible in the event of worsening 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 «BANK CREDIT DNIPRO» PJSC have been used, including: annual financial statements for 2013-2015 and 8 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