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

IBI-Rating informs on affirming of the credit rating of JSC «BANK 3/4» at uaA+ grade, with «evolving» outlook and CreditWatch listing. The rating of bank deposit reliability has been affirmed at «4+» grade (high reliability). The credit rating has been kept on the CreditWatch List due to the martial law imposed in connection with the invasion of russian troops in Ukraine, which has a significant negative impact on the country's economic condition and financial stability.

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 January 2025, the regulatory capital of the bank amounted to UAH 478 million.

The Bank has a substantial positive margin of deviation for prudential ratios. In particular, the regulatory capital adequacy exceeds the minimum requirement set by the regulator by nearly 6.5 times. The actual values of liquidity coverage ratio (LCR) for all currencies and in foreign currency were 977% and 495%, 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, 2025, is 441%, which significantly exceeds the minimum required value (100%) and indicates the availability of sufficient long-term funding. According to results of the 2024, the Bank's net operating income amounted to UAH 415.2 million, while the net profit exceeded UAH 32 million.

In the analyzed period, the level of administrative expenses to net operating income coverage (efficiency ratio) increased to 183%. Meanwhile, the indicators of basic asset and capital profitability remain at an adequate level – 2.1% and 5.3% respectively, indicating the institution's ability to generate capital through its operational results while maintaining an acceptable quality of income-generating assets.

Affirming of JSC «BANK 3/4» ratings is due to: maintaining high capitalization ratios, which allows absorbing potential losses in case of deterioration in asset quality; high level of liquidity; high quality of working assets and sufficient level of coverage of bad debts by formed provisions; as well as high performance indicators of the core business. At the same time, the Rating agency notes that the concentration of the loan portfolio and resource base by key counterparties remains and that there is an insufficient nominal balance of assets and liabilities by maturity. 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 2022-2024, 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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