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IBI-Rating has affirmed the credit rating of JSC «SKY BANK» at uaA- grade
24.03.2020
IBI-Rating informs on affirming of the credit rating of JSC «SKY BANK» at uaA- grade, the outlook is «evolving».
JOINT STOCK COMPANY «SKY BANK» is one of the first commercial banks of Eastern Ukraine, which was founded on 08.02.1991 as a limited liability company, with the name Regional Commercial Bank «Region-Bank». The bank is including to the group of banks with private capital — the main shareholder is the individual Babaev Arif (Kazakhstan), which owns 99.44% of the capital. The bank cooperates with clients from various sectors of the economy, with the priority being comprehensive customer service of companies and entrepreneurs using modern banking technology solutions.
According to the bank's information, the JSC «SKY BANK» has plans to increase the authorized capital in the II quarter of 2020 to UAH 400.1 million through additional contributions of the new strategic partner - Freedom Holding Corp (conducts financial activities, retail brokerage, investment consulting, securities trading, investment banking and underwriting services through its subsidiaries in Kazakhstan, Ukraine, Uzbekistan, Kyrgyzstan, the Russian Federation, Germany and Cyprus). It also plans to expand the institution's regional network through collaboration with a new bank participant. The total number of branches at the end of 2022 is planned to be increased to 17 affiliates.
According to the results of 2019, the operating income of JSC «SKY BANK» was over UAH 63 million, which primarily contributed to the significant result from the revaluation and sale/purchase operations of foreign currency. In turn, additional deductions to reserves for active operations against the background of increasing administrative expenses resulted in the bank receiving a negative financial result of UAH (-)27.5 million for the previous year. The efficiency ratio has improved slightly but remains low (97.7% in 2019), which is a sign of significant administrative costs against a backdrop of limited revenue. In turn, expanding the loan portfolio and borrowing less-expensive funds as subordinated debt help to improve profitability indicators if maintaining an acceptable quality of assets.
The affirming of the credit rating of JSC «SKY BANK» is conditioned by sufficient indicators of capitalization and liquidity, availability of financial support from the shareholder and related entities, an acceptable structure and quality of assets. At the same time, the concentration of the client loan portfolio and the deposit base by key counterparties is relevant for the bank; low performance indicators, given the significant investment in the development of the bank infrastructure. In addition, the institution's rating is influenced by the increased sensitivity of the banking system of Ukraine to operational and credit risks, which is caused by the worsening of the epidemiological situation in the country, as well as the economic and administrative restrictions on economic entities and the population.
In order to conduct the analytical research, the materials provided by JSC «SKY BANK» have been used, including: annual financial statements for 2017-2019 year, target performance indicators, 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
JOINT STOCK COMPANY «SKY BANK» is one of the first commercial banks of Eastern Ukraine, which was founded on 08.02.1991 as a limited liability company, with the name Regional Commercial Bank «Region-Bank». The bank is including to the group of banks with private capital — the main shareholder is the individual Babaev Arif (Kazakhstan), which owns 99.44% of the capital. The bank cooperates with clients from various sectors of the economy, with the priority being comprehensive customer service of companies and entrepreneurs using modern banking technology solutions.
According to the bank's information, the JSC «SKY BANK» has plans to increase the authorized capital in the II quarter of 2020 to UAH 400.1 million through additional contributions of the new strategic partner - Freedom Holding Corp (conducts financial activities, retail brokerage, investment consulting, securities trading, investment banking and underwriting services through its subsidiaries in Kazakhstan, Ukraine, Uzbekistan, Kyrgyzstan, the Russian Federation, Germany and Cyprus). It also plans to expand the institution's regional network through collaboration with a new bank participant. The total number of branches at the end of 2022 is planned to be increased to 17 affiliates.
According to the results of 2019, the operating income of JSC «SKY BANK» was over UAH 63 million, which primarily contributed to the significant result from the revaluation and sale/purchase operations of foreign currency. In turn, additional deductions to reserves for active operations against the background of increasing administrative expenses resulted in the bank receiving a negative financial result of UAH (-)27.5 million for the previous year. The efficiency ratio has improved slightly but remains low (97.7% in 2019), which is a sign of significant administrative costs against a backdrop of limited revenue. In turn, expanding the loan portfolio and borrowing less-expensive funds as subordinated debt help to improve profitability indicators if maintaining an acceptable quality of assets.
The affirming of the credit rating of JSC «SKY BANK» is conditioned by sufficient indicators of capitalization and liquidity, availability of financial support from the shareholder and related entities, an acceptable structure and quality of assets. At the same time, the concentration of the client loan portfolio and the deposit base by key counterparties is relevant for the bank; low performance indicators, given the significant investment in the development of the bank infrastructure. In addition, the institution's rating is influenced by the increased sensitivity of the banking system of Ukraine to operational and credit risks, which is caused by the worsening of the epidemiological situation in the country, as well as the economic and administrative restrictions on economic entities and the population.
In order to conduct the analytical research, the materials provided by JSC «SKY BANK» have been used, including: annual financial statements for 2017-2019 year, target performance indicators, 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