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IBI-Rating has upgraded the credit rating of JSC «BANK CREDIT DNEPR» to uaAA grade; the rating outlook is «evolving»

26.10.2020
Rating agency IBI-Rating informs on the upgrading of the credit rating of JSC «BANK CREDIT DNEPR» to uaAA grade; the rating outlook is «evolving». The rating of bank deposit reliability has been upgraded to «5» grade (excellent reliability).

JSC «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 and at the beginning of September 2020, the bank ranked the 21st by assets among the 74 banks of Ukraine. On July 30, 2020, Oleksandr Yaroslavskyi, the owner of the DCH Group, received approval from the National Bank of Ukraine to directly acquire a substantial stake in the amount of 100% of the shares in the authorized capital of JSC «BANK CREDIT DNEPR». As a result of concluding this agreement, Oleksandr Yaroslavskyi became the beneficiary of the banking institution. According to the Rating agency, joining the bank to one of the largest Ukrainian business groups DCH creates a solid foundation and additional opportunities for further development of JSC «BANK CREDIT DNEPR».

The bank has a sufficiently large base of clients, a well-developed infrastructure of card business services. During the analyzed period, the bank actively developed hryvnia retail and agribusiness lending. At the end of September this year, the shareholder increased the bank's capital by UAH 285 million. Accordingly, in the framework of the capitalization program, the total amount of capital increase of the institution due to the support of the shareholder during the past and current years amounted to UAH 752 million. Thus, the owner of the bank in a timely manner and fully provided the planned capitalization program of capital increase. As a result, as of October 1, 2020, the regulatory capital of JSC «BANK CREDIT DNEPR» increased to UAH 1.113 billion, and the regulatory capital adequacy ratio increased to 17.5% (with a minimum of 10% required). Accordingly, there was an improvement in other standards of the banking institution.

Due to the financial support of the shareholder, the bank had the opportunity form additional provisions in the amount of UAH 476.7 million, while obtaining a positive financial result - net profit of JSC «BANK CREDIT DNEPR» in January-September 2020 amounted to UAH 18.1 million. The improvement in the profitability of the banking institution in the analyzed period was also facilitated by the gradual increase in net interest income, which in January-September amounted to UAH 290.8 million, which is twice the result of the same period of the previous year. In addition, it should be noted that the bank optimized administrative expenses, which together with the aforecited, affected on the efficiency ratio (the level of administrative expenses covered by operating income from operating activities) to almost 104%, compared to 49% in the previous year.

The upgrading of the rating grades of JSC «BANK CREDIT DNEPR» is due to the availability of financial support from a new shareholder of the banking institution - the owner of one of the largest Ukrainian business groups DCH; the improvement of liquidity and capitalization indicators; positive dynamics of retail lending and lending to clients in the agro-industrial sector; acceptable diversification of the resource base, as well as the gradual decline in non-performing assets. At the same time, the Rating agency notes that the concentration of the client's loan portfolio by major borrowers is maintained, a significant share of the overdue debt on the clients' loans, as well as the incomplete balance of assets and liabilities to 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, what having a positive impact on the liquidity of the institution. The «evolving» credit rating outlook is due to the sensitivity of the banking system of Ukraine to operational and credit risks, conditioned by the deteriorating epidemiological situation in the country, as well as the probability of re-imposed of economic and administrative restrictions on entities and the population.

In order to conduct the analytical research, the materials provided by JSC «BANK CREDIT DNEPR» have been used, including: annual financial statements for 2017-2019 and 9 months of 2020, target performance indicators, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

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