IBI-Rating has affirmed the credit rating of JSC BANK 3/4 at the uaA grade

IBI-Rating informs on affirming of the credit rating of JSC «BANK 3/4» at uaA grade, with «negative» outlook and CreditWatch listing. The rating of bank deposit reliability has been affirmed at «4+» grade (high reliability).

JSC «Bank 3/4» has been operating in the financial market since 2008 and belongs to a group of banks with private capital in accordance with the criteria for segregation banks to groups. The only one shareholder of the bank is Mr. Ishchenko V.A. (Chairman of the Board). The bank is an active participant in the foreign exchange (conversion) operations market and actively invests funds in fixed-income government instruments.

At the beginning of this year, the regulatory capital of the bank amounted to UAH 490.4 million, including over 91% – the Tier 1 capital. The Bank has a substantial positive margin of deviation for prudential ratios. In particular, the adequacy of regulatory capital exceeds the regulator's level by more than 10 times. The actual values of liquidity coverage ratio (LCR) for all currencies and in foreign currency were 344% and 259%, respectively (with a minimum required level of 100%), that indicate a high level of the Bank's resilience to short-term liquidity shocks. The values of credit risk ratios remain insignificant. The actual value of the net stable funding ratio (NSFR) as of January 1, 2023, is 173%, which significantly exceeds the minimum required value (90%) and indicates the availability of sufficient long-term funding.

According to the results of 2022, the Bank's net operating income amounted to UAH 246.6 million, while the net profit was UAH 25.7 million. Due to the optimization of administrative expenses and the growth of net interest income, the level of coverage of administrative expenses by net operating income (activity efficiency ratio) increased to 127% in the analyzed period (compared to 112% in 2021). Meanwhile, the indicators of basic profitability of assets and capital remain at a sufficient level, 2.7% and 9.2% respectively, that indicates high ability to generate capital based on its operational results while maintaining an acceptable quality of income-generating assets.

Affirming of JSC «BANK 3/4» ratings is due to the high ratios of capitalization and liquidity, sufficient indicators of efficiency of the main activity while maintaining high quality of working assets, acceptable balance of assets and liabilities by maturity dates. At the same time, the Rating Agency notes the preservation of the concentration of the loan portfolio, as well as the resource base in the context of key counterparties. The Bank's ratings are also affected by the sensitivity of the banking system of Ukraine to operational and credit risks, which is due to the prolonged military actions on the territory of Ukraine by the aggression from Russia, as well as the deterioration of operating conditions and uncertainty regarding the prospects for economic development.

In order to conduct the analytical research the materials provided by JSC «BANK 3/4» have been used, including: financial statements based on the results of 2020-2022, 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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