IBI-Rating has affirmed the credit rating of «SBERBANK» JSC at uaAA+ grade

IBI-Rating informs on affirming of the credit rating of «SBERBANK» JSC at uaAA+ grade with a «negative» outlook and keeping the rating on the Credit Watch List. As well, the rating of bank deposit reliability has been affirmed at «5+» grade (excellent reliability).

Due to the additional increase in the authorized capital in the period under review (in amount of UAH 3.3 billion), the Bank’s capitalization is maintained at a sufficient level. As of the beginning of April 2019, the actual value of the regulatory capital adequacy ratio corresponded to the requirements of the regulator and was more than 35% (with the minimum required 10%). The actual values of the prudential ratios of liquidity (including LCR liquidity coverage ratio, set by the regulator at the beginning of 2019) also significantly exceed the minimum permitted values established by the NBU. According to the financial statement of the Bank as of 01.04.2019, more than UAH 5 billion was invested in deposit certificates of NBU. The level of coverage of current liabilities with highly liquid assets is high - more than 300%, which indicates the high ability of the institution to settle its liabilities.

«SBERBANK» JSC has high operational efficiency indicators - according to the results by 2018 and Q1 of 2019 net operating income more than in twice exceeded the general administrative expenses. In turn, it should be noted that according to the results of the latest diagnosis of asset quality in the period under review, the bank recognized additional losses by NPL, which led to the formation of additional provisions in a significant amount. As a result, the activity of the banking institution in the previous year and Q1 of 2019 was unprofitable - the net financial result for the specified period amounted to UAH (-)7.6 billion and UAH (-)1.0 billion.

The affirmation of the ratings of «SBERBANK» JSC is due to an increase in the authorized capital, high operating efficiency indicators, strong market positions, as well as diversification of investment funds and sources of resources. At the same time, the concentration of client loan portfolio by major borrowers remains, which increases the vulnerability to credit risk. The Bank’s ratings are also influenced by the uncertainty of the development strategy (taking into account the NBU sanctions imposed and the arrest of bank shares), the banking system’s high sensitivity to operational risks, which is caused by the volatility of the legislative field, the difficult economic situation, and limited financial capabilities of the population and enterprises in the real sector.

Keeping of the credit rating in the Credit Watch List is due to the entry into force of the Decision of the National Security and Defense Council of Ukraine, taken on 01 March 2018, on «Personal Special Economic and Other Restrictive Measures (Sanctions)» with regard to Ukrainian banks with the Russian state capital (in March 2019, the continuance of the sanctions was extended by another two years).

In order to conduct the analytical research, the materials provided by «SBERBANK» JSC have been used, including: financial statements based on the results for 2016-2018 and the Q1 of 2019, 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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