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IBI-Rating has upgraded the rating of bank deposit reliability of «BANK CREDIT DNIPRO» PJSC to 4+ grade (high reliability)
04.07.2016Rating agency IBI-Rating informs on upgrading of the rating of bank deposit reliability of «BANK CREDIT DNIPRO» PJSC from «4» grade to «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 National Bank of Ukraine (hereinafter the NBU). The problems with a timely return of deposits are unlikely to arise, although there is a certain dependence of the financial institution on the impact of external and internal factors.
The increased grade of the rating of bank deposit reliability of the Bank is due to the preservation of high growth rates of key indicators of the Bank’s activity, which demonstrate positive dynamics despite the unstable situation in the country. Also, the upgraded rating was influenced by the support of the owners of «BANK CREDIT DNIPRO» PJSC in the form of contributions to the authorized capital during 2015 – 1Q 2016 and the available guarantee letter of intent for further capitalization.
«BANK CREDIT DNIPRO» PJSC meets its obligations to creditors in a timely manner and in full volume. Liquidity ratios are at an acceptable level. The volume of highly liquid assets is sufficient and consists mainly of balances on current accounts in other banks. The existing dependence of the Bank on major corporate customers both in the resource base, and in the asset structure may put pressure on the Bank's liquidity and increases its sensitivity to certain financial risks. At the same time, the Bank has a significant amount of relatively stable funds, attracted from companies that are recognized under the related parties legal and regulatory acts of the NBU, which has a positive impact on the Bank’s liquidity; while the volume of loans, granted to such companies, is minimal.
Also, «BANK CREDIT DNIPRO» PJSC may be susceptible to foreign currency risk due to a significant amount of foreign currency denominated loans and the lack of foreign currency earnings of borrowers. Moreover, the impact on sensitivity to certain financial risks may increase as a result of persisting negative tendencies in the country’s economy and reduced solvency of borrowers. A key component of the resource base remains amounts due to customers, which are formed mainly by funds of individuals, thus, the customer deposit portfolio is diversified by major depositors.
During the period under review, activities of BANK CREDIT DNIPRO» PJSC were unprofitable due to channelling of a significant amount of funds on the formation of provisions for active operations, which is why performance indicators remained low, but complying with the NBU Action Plan on elimination of violations of the Bank’s economic ratios, which envisages making profitable operations in 2017.
IBI-Rating currently sees no factors that may lead to changes in the Bank credit rating grade in the short term. The following factors may have an impact on the credit rating grade: changes in the level 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, decreased profitability, 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 3 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.
Finance department
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua
The increased grade of the rating of bank deposit reliability of the Bank is due to the preservation of high growth rates of key indicators of the Bank’s activity, which demonstrate positive dynamics despite the unstable situation in the country. Also, the upgraded rating was influenced by the support of the owners of «BANK CREDIT DNIPRO» PJSC in the form of contributions to the authorized capital during 2015 – 1Q 2016 and the available guarantee letter of intent for further capitalization.
«BANK CREDIT DNIPRO» PJSC meets its obligations to creditors in a timely manner and in full volume. Liquidity ratios are at an acceptable level. The volume of highly liquid assets is sufficient and consists mainly of balances on current accounts in other banks. The existing dependence of the Bank on major corporate customers both in the resource base, and in the asset structure may put pressure on the Bank's liquidity and increases its sensitivity to certain financial risks. At the same time, the Bank has a significant amount of relatively stable funds, attracted from companies that are recognized under the related parties legal and regulatory acts of the NBU, which has a positive impact on the Bank’s liquidity; while the volume of loans, granted to such companies, is minimal.
Also, «BANK CREDIT DNIPRO» PJSC may be susceptible to foreign currency risk due to a significant amount of foreign currency denominated loans and the lack of foreign currency earnings of borrowers. Moreover, the impact on sensitivity to certain financial risks may increase as a result of persisting negative tendencies in the country’s economy and reduced solvency of borrowers. A key component of the resource base remains amounts due to customers, which are formed mainly by funds of individuals, thus, the customer deposit portfolio is diversified by major depositors.
During the period under review, activities of BANK CREDIT DNIPRO» PJSC were unprofitable due to channelling of a significant amount of funds on the formation of provisions for active operations, which is why performance indicators remained low, but complying with the NBU Action Plan on elimination of violations of the Bank’s economic ratios, which envisages making profitable operations in 2017.
IBI-Rating currently sees no factors that may lead to changes in the Bank credit rating grade in the short term. The following factors may have an impact on the credit rating grade: changes in the level 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, decreased profitability, 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 3 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.
Finance department
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua