PRESS-RELEASE

(Translation from Russian)

Outlook on the credit rating of PJSC JSB «Ukrgasbank» is improved up to positive one

            June 14, 2012 the rating committee of RA «Expert-Rating» has decided to improve the outlook from stable to positive for the credit rating of PJSC JSB «Ukrgasbank» and for the bond rating of the Bank of Series C, D, and E. The credit rating of the bank and the bonds is confirmed at the level uaBBB+ according to the national scale. The borrower with rating uaBBB+ is characterized by a good solvency in comparison with other Ukrainian borrowers. Making decision of confirming the credit rating according to the national scale, the Agency was guided by the results of the Bank’s activity in the Q1 of 2012.

Table 1

Key indicators of PJSC JSB «Ukrgasbank», th. UAH, p.p.,%

Source: data of PJSC JSB «Ukrgasbank», calculations by RA «Expert-Rating»

1. In the period from 01.04.2011 to 01.04.2012 PJSC JSB «Ukrgasbank» has considerably increased the amounts of active and passive operations. Thus, assets of the Bank have increased by 43,85% or by UAH 5,916 bn and have reached to UAH 19,407 bn as of 01.04.2012, liabilities have amounted to UAH 16,512 bn that is by 42,84% more than as of 01.04.2011, shareholders’ equity has grown by 49,87% or by UAH 963,3 mln and has amounted to UAH 2,895 bn. A significant increase in the Bank’s assets has resulted from a significant increase in liquid assets (by 73,39% or by UAH 2,095 bn) and from an increase in the portfolio of securities (by 135,05% or by UAH 3,367 bn). At the same time, the loan portfolio of the Bank has continued reducing: customer credits and debt of the Bank have decreased by 45,58% or by UAH 5,545 bn in the period from 01.04.2011 to 01.04.2012 and have amounted to UAH 6,621 bn as of the beginning of the Q2 of 2012

2. During the analyzed period the Bank has managed to significantly increase its resource base due to raising funds from legal entities in the interbank market. Thus, funds of banks have increased by 69,11% or by UAH 3,526 bn and have amounted to UAH 8,629 bn as of 01.04.2012 compared to 01.04.2011, funds of legal entities have grown by 88,05% or by UAH 927,4 mln and have amounted to UAH 1,981 bn. Funds of individuals have also demonstrated a positive dynamics of growth: as of 01.04.2012 they have amounted to UAH 4,636 bn that is by 6,03% or by UAH 263,6 mln more than as of 01.04.2011. Besides, during the given period the authorized capital of the Bank has significantly been increased (by UAH 4,3 bn), resulting in its volume has reached to UAH 10 bn that, in its turn, has enabled the Bank to maintain capital adequacy at a high level. Thus, as of 01.04.2012 the ratio between shareholders’ equity and assets of the Bank has amounted to 14,92% (the average of the banking system – 14,99%), the norm of regulatory capital adequacy (N2) is at the level 18,90% (the minimal norm – not less than 10%), and the norm of the ratio of regulatory capital to assets (N3) has been equaled to 10,13% (the required norm – not less than 9%).

 3. In the period from 01.04.2011 to 01.04.2012 loan provisions, formed by the Bank, have increased by 43,67% or by UAH 2,191 bn and have amounted to UAH 7,207 bn, resulting in the ratio of loan provisions to customer credits and debt of the Bank has increased by 67,62 p.p.: from 41,23% up to 108,85%. Therefore, the risks of the Bank’s loan portfolio are covered by the formed provisions with excess. At the same time, customer credits and debt of the Bank have reduced by UAH 5,545 bn or by 45,58% during the given period, and the proportion of the loan portfolio in the Bank’s assets has decreased from 90,17% down to 34,11%. The proportion of the securities portfolio in the structure of the Bank’s assets has increased (from 18,48% up to 30,19%), and the proportion of liquid assets and interbank lending has also grown (from 21,15% up to 25,5%).

4. Liquidity indicators of the Bank still are at the excessively high level. The ratio of liquid assets to liabilities has increased by 5,28 p.p. and has amounted to 29,97% as of 01.04.2012 compared to 01.04.2011, the norm of the Bank’s instant liquidity (N4) has grown by 17,84 p.p. and has amounted to 47,88% (with the minimal norm – not less than 20%), the norm of current liquidity (N5) has increased by 11,92 p.p., having reached to 62,29% (with the required norm – not less than 40%), the norm of short-term liquidity (N6) has amounted to 92,46% (with the required norm – not less than 60%). At the same time, net profit of the Bank has significantly increased: its volume has grown in 30 times (from UAH 3,188 mln up to UAH 94,461 mln) following the results of the Q1 of 2012 compared to the same period of the Q1 of 2011. Key factor of a considerable increase in the Bank’s profit has become a significant increase of the financial result from securities sales, which has increased in 16 times and has amounted to UAH 25,969 mln, as well as an increase in income from operations in foreign currency, which has grown in 6 times and has amounted to UAH 19,153 mln. At the same time, net interest income of the Bank has reduced by 26,16% and has amounted to UAH 167,4 mln, and net commission income has increased only by 5,19%, having amounted to UAH 24,215 mln.

Therefore, the activity of PJSC JSB «Ukrgasbank» has remained profitable following the results of the Q1 of 2012. On 01.04.2012 the bank has complied with the norms of liquidity and capital adequacy with excess from the norms set by NBU, and risks of the bank’s loan portfolio have been excessively covered by reserves. This situation is the reason for the improvement of outlook on the credit rating of the Bank and its bonds. Its credit rating will be improved if positive trends in the development of the Bank are preserved.

Analytical service of RA «Expert-Rating»

Confirmation of PJSC JSB «Ukrgasbank» (english version) - 14.06.2012