IBI-Rating has affirmed the ratings of JSC «BANK CREDIT DNEPR»

Rating agency IBI-Rating informs on affirming of the credit rating of JSC «BANK CREDIT DNEPR» at uaAA+ grade with «negative» outlook and CreditWatch listing. The rating of bank deposit reliability has been affirmed at «5» grade (excellent reliability). The negative outlook and Credit Watch listing are due to the deterioration of operating conditions and increased uncertainty about the prospects for economic development against the backdrop of prolonged hostilities on the territory of Ukraine caused by aggression from the russian federation.

JSC «BANK KREDIT DNEPR» (hereinafter - the Bank) has been operating in the banking market since July 1993. According to the classification of the National Bank of Ukraine, the bank is in the group of banks with private capital and as of the beginning of October 2022, the bank ranked the 17th by assets among 67 banks of Ukraine. The sole shareholder of the bank institution is Oleksandr Yaroslavskyi, the owner of the DCH group. According to the Rating agency, joining the bank to one of the largest Ukrainian business groups DCH creates a solid foundation and additional opportunities for further development of JSC «BANK CREDIT DNEPR».

Despite the difficult operating conditions during martial law, the Bank's profitability indicators remained at a high level and had positive dynamics in the analyzed period. Thus, there was a significant increase in net operating income, amounting to UAH 1.2 billion in January-September 2022, which exceeded the result of the same period last year by 44% and contributed to maintaining the value of the activity efficiency coefficient at the level of more than 290%. The Bank managed to form additional reserves for customer loan debt and at the same time obtain a positive financial result, taking into account the significant growth of interest income and the result of trading operations - the bank's net profit at the end of the 3rd quarter of 2022 amounted to UAH 143.6 million.

The Bank continues to implement new lending programs (including within the framework of state support programs), develop retail, agricultural and corporate lending, and expand the working loan portfolio, which has resulted in improved performance indicators. Together with the expansion of the working credit portfolio, active activities to settle bad debt, increasing the provisions, write-offs against the provisions allow to keep the share of bad debt in the net loan portfolio (taking into account the loan loss provisions) at a low level - as of October 1, 2022 the indicator did not exceed 6.4%.

The Bank has a high level of liquidity with an upward trend. JSC «BANK CREDIT DNEPR» fulfills the requirements for the value of the liquidity coverage ratio (LCR) with a significant margin - as of the beginning of October 2022, the actual value of LCR for all currencies and in foreign currency was 196% and 195%, respectively (at minimum required 100%), which indicates a high level of Bank's resistance to short-term liquidity shocks. The value of the net stable financing ratio (NSFR) as of October 1, 2022 was 205%, which by a significant margin exceeds the minimum required value (90%) and indicates the presence of a sufficient level of long-term financing. Due to the positive financial result, the Bank maintains the value of regulatory capital at the level of UAH 1.5 billion, and the value of the H2 capital adequacy standard was almost 22% as of October 1, 2022 (at the required 10%).

The affirmation of JSC «BANK CREDIT DNEPR» ratings is due to: the preservation of activity efficiency indicators at a high level and their improvement; profitable activity; maintenance of capitalization indicators at a sufficient level; acceptable diversification of the resource base; growth of the working loan portfolio, maintenance of provisioning volumes at a sufficient level; low level of problem debt share in the net loan portfolio; a significant volume of highly liquid assets and improvement of liquidity standards, as well as the availability of financial support from the bank's shareholder. Along with this, the Rating Agency notes the insufficient balance of assets and liabilities in terms of maturity, the sensitivity of the banking system to operational and credit risks, which is due to the long-term military operations on the territory of Ukraine due to aggression by the russian federation, as well as the deterioration of operating conditions and uncertainty regarding economic development prospects.

In order to conduct the analytical research, the materials provided by JSC «BANK CREDIT DNEPR» have been used, including: annual financial statements for 2019-2021 and 9 months of 2022, 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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