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, the rating outlook is «evolving». As well, the rating of bank deposit reliability has been affirmed at «5+» grade (excellent reliability).

Due to the additional shareholder contributions to the authorized capital, as well as profit in 2019, the bank's capitalization is maintained at a high level - as of April 1, 2020, the actual value of the regulatory capital adequacy ratio meets the regulator's requirements and more than 5 times exceeded the minimum required value. 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. The level of coverage of current liabilities with high liquid assets was at the level of more than 422% as of the end of Q1 of 2020, which testifies to the very high ability of the institution to pay on its own liabilities.

The main part of the income assets of «SBERBANK» JSC is concentrated in the segment of corporate business, so this area forms the basis of net operating income; the retail direction is mainly resource. The ratio of administrative expenses to total revenues is gradually increasing (45% in January-March 2020), due to the reduction of the loan portfolio and, accordingly, a decrease in net operating income. In turn, a significant increase in equity contributes to savings in interest costs and, accordingly, allows to maintain performance indicators at a high level. Thus, according to the results of the Q1 of 2020, the level of coverage of administrative expenses by the received net operating income (efficiency ratio) was almost 170%.

The activity of the banking institution in 2019 was profitable - net profit last year amounted to almost UAH 272 million. In turn, in January-March 2020, the financial result was negative (UAH -116 million), mainly due to additional contributions to reserves (over UAH 340 million), as well as a partial reduction in net interest income.

The affirmation of the ratings of «SBERBANK» JSC is due to high grades of capitalization, liquidity and performance, 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), the banking system’s high sensitivity to operational risks, which is caused by the volatility of the legislative field, the difficult economic situation, as well as the slowdown in business activity due to the deteriorating epidemiological situation in the country and the introduction of economic and administrative restrictions.

In order to conduct the analytical research, the materials provided by «SBERBANK» JSC have been used, including: financial statements based on the results for 2017-2019 and 3 months by 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

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