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IBI-Rating has affirmed the rating of bank deposit reliability of PJSC "APECS - BANK" at grade 4

11.09.2015
IBI-Rating informs on the affirmation of the rating of bank deposit reliability of PJSC "APECS - BANK" at grade 4 (high reliability). The rating of bank deposit reliability at grade 4 indicates that the financial institution is reliable, it timely meets its commitments within the requirements established by the current legislation of Ukraine, including the requirements of the National Bank of Ukraine. The likelihood of problems with regard to timely return of deposits is low, although there is a certain dependence of the financial institution on the impact of external and internal factors. The impact assessment of external factors does not apply to the situations related to force majeure circumstances.

The affirmed rating grade is due to a sufficient level of the Bank’s capitalization as evidenced by the sufficient actual value of the economic regulatory capital adequacy ratio. It is worth noting that the volume of the equity capital is below the authorized level because of the significant volume of the losses incurred in the current year, which have reduced the amount of the equity capital. PJSC "APECS - BANK" in a timely manner and in full complies with its obligations to creditors. The volume of highly liquid assets is at a sufficient level, but their structure is dominated by the balances on correspondent accounts with other banks. At the same time, the Bank's vulnerability to liquidity risk increases, given the concentrations of the client loan portfolio by major borrowers and the resource base by major creditors. The impact on susceptibility to financial risks may also increase as a result of persistence of adverse trends in the economy and the reduced solvency of borrowers.

The main component of the resource base are customer accounts, which, given the current situation in the country, carries a potential threat to the deteriorating of liquidity due to the increasing distrust of the population in the banking system. At the same time it is worth noting that the Bank adheres to regulatory requirements and meets its obligations in a timely manner. The rating agency «IBI-Rating» detected no significant complaints from the clients with respect to the Bank’s operations. In addition, according to the Rating agency, the Bank, if necessary, can count on support of the owners, as evidenced by attracting the owner’s funds in the form of subordinated debt. During the six months of the research, the Bank’s dependence on the financial condition of major borrowers has increased, which increases the Bank’s susceptibility to credit risk. In the 1st quarter the Bank's operations were profitable, but in the 2nd quarter the Bank sustained a loss, which reduced the amount of the previously generated profit.

A positive impact on the rating of bank deposit reliability may have the following: the improved quality of assets and the reduced dependence on the financial condition of major borrowers, the reduced concentration of the resource base by creditors and the client deposit portfolio by major depositors, as well as the implementation of the main directions of the Bank development strategy. A negative impact on the rating of bank deposit reliability may have the following: the deterioration of the Bank’s solvency (liquidity), the growth of credit risks due to the asset quality deterioration, the Bank's increased vulnerability to market risks, the decline in performance indicators and maintaining of unprofitable activities as well as the aggravation of the political and economic situation in the country.

In order to perform the analytical research the following materials have been used: the documents provided by PJSC "APECS - BANK", including the annual financial statements for 2011-2014 and the quarterly financial statements for the Ist half of 2015, the target performance indicators for the IInd half of 2015, other necessary internal information as well as the information from public sources, which the rating agency considers reliable.

Department of finance ratings area
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua