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IBI-Rating has affirmed the credit rating of JSB «UKRGASBANK» at uaAA+ grade
18.05.2023
IBI-Rating informs on affirming of the credit rating of JSB «UKRGASBANK» at uaAA+ grade, with outlook revision from «negative» to «evolving». The credit rating has been kept on the Credit Watch List due to the martial law imposed in connection with the invasion of Russian troops into Ukraine, which has a significant negative impact on the country's economic condition and financial stability. The rating of bank deposit reliability has been affirmed at «5+» grade (excellent reliability).
JSB «UKRGASBANK» has been operating in the banking market since January 1999. Since 2009, the State represented by the Ministry of Finance of Ukraine (almost 95% of shares) has been the key owner of the institution. According to the results of 3 months of 2023, JSB «UKRGASBANK» ranked 5th among 65 banks in terms of assets, 3rd - in terms of funds raised from legal entities, 9th - in terms of retail deposits, 8th - in terms of balance sheet capital and 7th - in terms of financial result. JSB «UKRGASBANK» has the status of a systemically important bank (systemically important banks concentrate significant amounts of capital, assets, liabilities, and are usually characterized by a significant volume and complexity of operations). The bank is also included in the list of critical infrastructure facilities in the banking system of Ukraine. The bank's customer base is diversified by types of counterparties, industries, regions, and products used by the bank's customers. The Bank has a developed network of territorial subdivisions covering all regions of Ukraine.
The bank is profitable and demonstrates good efficiency indicators of the main activity. A relatively inexpensive resource base has a positive effect on the result of operational activity - the amount of net operating income from the main activity according to the results of 2022 and January-March 2023 amounted to UAH 7.1 billion and UAH 1.7 billion, respectively. The volume of administrative expenses in the specified period remained acceptable, which contributes to the high value of the activity efficiency ratio - 165% according to the results of the first quarter of 2023. Taking into account the high risks of assets devaluation in connection with a full-scale invasion, additional provisions for active operations were the largest in recent years and reached almost UAH 6 billion in 2022, which led to a negative financial result in the amount of UAH 2.8 billion. In the first quarter of 2023, the Bank released provisioning in the amount of UAH 723 million, which had a positive effect on the final financial result. Accordingly, the net profit of JSB «UKRGASBANK» for 3 months of 2023 amounted to UAH 1.4 billion.
The affirmed credit rating grade of JSB «UKRGASBANK» with change of credit rating outlook to «evolving» is due to the long-lasting strong market positions and diversification of activities by attracting new customers; sufficient capitalization and liquidity ratios; good asset quality and sufficient provisioning for bad debts; high performance indicators of the core business, as well as support from the state. At the same time, the Rating agency takes into account the concentration of the loan portfolio by major borrowers, the sensitivity of the banking system to operational and credit risks caused by ongoing military operations in Ukraine due to aggression of Russian Federation, as well as the deterioration of the operating environment and uncertainty about the prospects for economic development. In order to conduct the analytical research the materials provided by JSB «UKRGASBANK» have been used, including: annual financial statements for 2020-2022 and 3 months of 2023, target performance indicators, 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 us:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua
JSB «UKRGASBANK» has been operating in the banking market since January 1999. Since 2009, the State represented by the Ministry of Finance of Ukraine (almost 95% of shares) has been the key owner of the institution. According to the results of 3 months of 2023, JSB «UKRGASBANK» ranked 5th among 65 banks in terms of assets, 3rd - in terms of funds raised from legal entities, 9th - in terms of retail deposits, 8th - in terms of balance sheet capital and 7th - in terms of financial result. JSB «UKRGASBANK» has the status of a systemically important bank (systemically important banks concentrate significant amounts of capital, assets, liabilities, and are usually characterized by a significant volume and complexity of operations). The bank is also included in the list of critical infrastructure facilities in the banking system of Ukraine. The bank's customer base is diversified by types of counterparties, industries, regions, and products used by the bank's customers. The Bank has a developed network of territorial subdivisions covering all regions of Ukraine.
The bank is profitable and demonstrates good efficiency indicators of the main activity. A relatively inexpensive resource base has a positive effect on the result of operational activity - the amount of net operating income from the main activity according to the results of 2022 and January-March 2023 amounted to UAH 7.1 billion and UAH 1.7 billion, respectively. The volume of administrative expenses in the specified period remained acceptable, which contributes to the high value of the activity efficiency ratio - 165% according to the results of the first quarter of 2023. Taking into account the high risks of assets devaluation in connection with a full-scale invasion, additional provisions for active operations were the largest in recent years and reached almost UAH 6 billion in 2022, which led to a negative financial result in the amount of UAH 2.8 billion. In the first quarter of 2023, the Bank released provisioning in the amount of UAH 723 million, which had a positive effect on the final financial result. Accordingly, the net profit of JSB «UKRGASBANK» for 3 months of 2023 amounted to UAH 1.4 billion.
The affirmed credit rating grade of JSB «UKRGASBANK» with change of credit rating outlook to «evolving» is due to the long-lasting strong market positions and diversification of activities by attracting new customers; sufficient capitalization and liquidity ratios; good asset quality and sufficient provisioning for bad debts; high performance indicators of the core business, as well as support from the state. At the same time, the Rating agency takes into account the concentration of the loan portfolio by major borrowers, the sensitivity of the banking system to operational and credit risks caused by ongoing military operations in Ukraine due to aggression of Russian Federation, as well as the deterioration of the operating environment and uncertainty about the prospects for economic development. In order to conduct the analytical research the materials provided by JSB «UKRGASBANK» have been used, including: annual financial statements for 2020-2022 and 3 months of 2023, target performance indicators, 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 us:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua