IBI-Rating has affirmed the credit rating of JSC «BANK 3/4» at uaA grade, the outlook is «evolving»

IBI-Rating informs on affirming of the credit rating of JSC «BANK 3/4» at uaA grade, the outlook is «evolving». The rating of bank deposit reliability has been affirming 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 banking institution is an active participant in the market of currency exchange (conversion) operations, and also actively invests in government instruments with fixed income.

As of the beginning of July 2020, the bank's regulatory capital amounted to almost UAH 502 million, of which over 93% was Tier 1 capital. The institution has a significant margin for most prudential ratios. In particular, the regulatory capital adequacy is more than 17 times higher than the level set by the regulator, and the actual values of the liquidity coverage ratio LCR for all currencies and in foreign currency were 1,060% and 589%, respectively (with a minimum of 100%), indicating a high level of bank stability to the short-term liquidity shocks.

JSC «BANK 3/4» is highly profitable, as evidenced by the financial result of the institution and performance indicators in recent years. Thus, according to the results of January-June 2020, the net operating income of the bank amounted to over UAH 207 million, net profit amounted to UAH 11.1 million. The level of coverage of administrative expenses by net operating income (efficiency ratio) decreased slightly in the analyzed period, due to rising staff costs. In turn, the indicators of basic return on assets and capital remain at a high level, which indicates a sufficient ability of the institution to generate capital from results of operations, while maintaining the acceptable quality of profitable assets.

Affirming of credit rating of JSC «BANK 3/4» is due to the high ratios of capitalization, liquidity and effectiveness of core activities while maintaining good quality of working assets. At the same time, the Rating Agency notes the lack of balance of assets and liabilities by maturity, as well as maintaining the concentration of the loan portfolio and resource base in terms of key counterparties. The ratings of the banking institution are also affected by the increasing sensitivity of the banking system of Ukraine to operational and credit risks, due to the deteriorating epidemiological situation in the country, as well as the imposed of economic and administrative restrictions on entities and the population.

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 2017-2019 and the first half of 2020, target performance indicators, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

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