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IBI-Rating has affirmed the rating of bank deposit reliability of "BTA BANK" PJSC at grade 5

16.10.2015
IBI-Rating informs on the affirmation of the rating of bank deposit reliability of "BTA BANK" PJSC at grade 5 (excellent reliability).

The rating of bank deposit reliability at grade 5 indicates that the financial institution is reliable, pays timely its obligations within the requirements established by the current legislation of Ukraine, including those of the National Bank of Ukraine, and has a good reputation. The likelihood of problems with a timely return of deposits is low, as the financial institution is not susceptible to the impact of the adverse external and internal factors. The impact assessment of external factors does not apply to the situations involving force majeure circumstances.

The affirmed rating grade of "BTA BANK" PJSC is the result of the Bank’s maintaining high capitalization level, in addition, its capital is secured by the real estate property that is owned by the financial institution. The Bank meets its obligations to creditors in a timely manner and in full. The actual values of liquidity ratios are at a high level, including dut to the additional investments in treasury securities issued by the National Bank of Ukraine. The Bank’s assets and liabilities are well balanced by terms to maturity. Howerver, realization of credit and market risks may put pressure on the Banks' liquidity. But, in the opinion of the Rating agency, the Bank, if necessary, can count on the owners’ support. During the analyzed half year there was deterioration in the quality of loans by risk categories, but the volume of overdue debts remained almost unchanged.

At the same time, a significant the amount of funds was forwarded by the Bank to provide for the reserves for the granted loans. In addition, the Bank's dependence on the financial condition of its major borrowers increases the Bank’s vulnerability to credit risks. The impact on susceptibility to financial risks may increase as a result of the persistence of negative trends in the economy and reduced solvency of borrowers. The main sources of funding of the resource base are amounts due to customers, the owner’s funds taking into account the authorized capital, as well as funds of the NBU. However, the available concentration of the resource base by major creditors increases the Bank’s vulnerability to liquidity risk. Also, given the current situation in the country, a significant amount of funds of individuals contains a potential threat of deteriorating liquidity due to decreasing confidence of the population in the banking system. At the same time, the Rating agency «IBI-Rating» did not reveal any complaints from the customers to the Bank’s operations.

Overall, during the entire analyzed period the Bank’s operations were profitable. The Bank continues operating under the programme of the financial turnaround, which it has been implementing successfully. Performance indicators decreased due to significant provisioning for reserves due to deterioration of the quality of the granted loans.

A positive impact on the rating of bank deposit reliability may have the following: reduced dependence on the financial condition of major borrowers, reduced concentration of the resource base by creditors. A negative impact on the rating of bank deposit reliability may have the following: deterioration of the Bank’s solvency (liquidity), realization of the credit risk due to deterioration in servicing of the granted loans, increased vulnerability of the Bank to market risks, loss-making operations, as well as the deterioration of the political and economic situation in the country.

In order to carry out the analytical research the materials provided by "BTA BANK" PJSC were used, including the annual financial statements for 2011-2014 and the Ist half of 2015, 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.

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