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

IBI-Rating informs on affirming of the credit rating of JSC «UNEX BANK» at uaA, the outlook is «evolving». The rating of bank deposit reliability has been affirmed at «4+» grade (high reliability).

JSC «UNEX BANK» has been operating in the banking market since 1993 and belongs to the group of banks with private capital. The main shareholder of the banking institution is the company «WITHINE INVESTMENTS LTD» (Cyprus), which owns 94.98% of the shares. The beneficial owner of the bank is Mr Vadym Novynskyi. By results of the first half of 2020, among 75 banks of Ukraine, JSC «UNEX BANK» ranked 63rd in terms by the size of assets; 60th - by the amount of funds raised from entities; 54th by the size of the population's funds; 57th - by the size of the balance capital, and 68th in terms of the financial result.

At the beginning of July 2020 the regional network of JSC «UNEX BANK» is represented by head office and 218 branches in 9 oblasts of Ukraine. The bank actively opens sales offices in shopping centers, which does not incur significant costs for a banking institution, as well as facilitates the attraction of new clients and the diversification of active and passive operations in the context of counterparties. In addition to large corporate clients, the bank also provides services for the small business and individuals. In order to improve the quality of the loan portfolio, the bank's budget for 2020 provides for a reduction in consumer lending and the launch of a new high-margin mortgage product with a low level of risk.

Due to the significant amount of investments in government securities, the level of coverage of current liabilities by highly liquid assets (quick liquidity) remains at almost 170%, which indicates the high ability of the institution to pay for its own obligations. The balance of assets and liabilities of the bank is sufficient, in addition, the institution has a certain liquidity surplus. The dynamics of net operating income is relatively stable. In turn, the ratio of administrative expenses to net operating income remains high, which limits the performance of the institution. At the same time, the availability of cheap resources in the form of funds of enterprises in current accounts provides an opportunity to increase net interest income from the placement of such resources in government securities and maintain the value of the efficiency ratio at a satisfactory level. In the analyzed period, the bank formed additional reserves for active transactions with customers (amounting to almost UAH 18 million), which had a negative impact on the net financial result. Thus, in the first half of 2020, JSC «UNEX BANK» worked with a loss of UAH 8.3 million.

The affirming of the ratings of JSC «UNEX BANK» is due to sufficient capitalization ratios, satisfactory asset quality and a sufficient level of non-operating loan coverage with established provisions. Also, the agency notes a significant amount of sufficiently stable funds borrowed from companies recognized as affiliated with the bank; high liquidity ratios and sufficient balance of assets and liabilities by maturity. In turn, the concentration of active and passive operations by main 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 «UNEX BANK» have been used, including: annual financial statements during the period 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.

Finance department
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