August 19, 2013 the rating committee of RA «Expert-Rating» has decided to improve the credit rating of PJSC «MAGABANK» (09804119) and the Bank’s bonds up to the level uaA+ according to the national scale. The borrower with rating uaA+ is characterized by a high solvency compared to other Ukrainian borrowers. Making decision to improve the credit rating according to the national scale, the Agency was guided by the results of the Bank’s activity in the H1 of 2013.

1. In the H1 of 2013 key balance sheet indicators of PJSC «MEGABANK» have demonstrated significant growth rates. Since the beginning of the year the shareholders’ equity of the Bank has grown by 0,86%, its liabilities – by 6,13%, assets – by 5,41%, customer credits and debt, including reserves – by 8,00%.

In the liabilities’ structure of PJSC «MEGABANK» there have been no significant changes, a considerable proportion of the Bank’s liabilities (70,71% on 01.07.2013) are still funds of legal entities and individuals (table 1).

Table 1

Key balance sheet indicators of PJSC «MEGABANK»

according to the results of the H1 of 2013

th. UAH, %, p.p.

Indicators	01.07.2013	01.01.2013	Change	Growth rate, %
Shareholders’ equity	661954	656324	5630	0.86%
Authorized capital	500000	500000	0	0.00%
Shareholders’ equity/Assets ratio, %	12.97%	13.56%	-0.59 p.p.	-
Total liabilities	4440005	4183734	256271	6.13%
Including liabilities in foreign currency	2490442	2330761	159681	6.85%
Funds of banks	256142	126989	129153	101.70%
Funds of individuals	1777479	1580888	196591	12.44%
Funds of legal entities	1362438	1218747	143691	11.79%
Total assets	5101959	4840058	261901	5.41%
Liquid assets (Cash and cash equivalents + Funds of mandatory reserves in NBU + Trading securities + Funds in other banks)	700826	769908	-69082	-8.97%
Customer credits and debt	4022503	3724658	297845	8.00%
Loan provisions	256512	228413	28099	12.30%
Loan provisions/ customer credits and debt ratio, %	5.99%	5.78%	0.22 p.p.	-
Securities for sale	70269	69633	636	0.91%
Securities for sale provision	416	78	338	433.33%
Liquid assets/Liabilities ratio, %	15.78%	18.40%	-2.62 p.p.	-

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

2. Key norms of PJSC «MEGABANK» according to the results of the H1 of 2013 have demonstrated a slight correction, which, in the Agency’s opinion, has been related to the increase in the Bank’s business activity. Thus, in the period from 01.01.2013 to 01.07.2013 the regulatory capital of the Bank has reduced by UAH 33,725 bn, the regulatory capital adequacy has fallen by 1,86 p.p., but has complied with a significant excess to its norm. The ratio of the regulatory capital to total assets has also decreased by 2,21 p.p. down to 13,41% with the limit of 9% set by NBU.

Liquidity norms of PJSC «MEGABANK» have decreased, but have complied with large reserve in relation to the limit, set by NBU. For example, instant liquidity has reached 50,33% with the norm of 20%, current liquidity has amounted to 57,7% on 01.07.2013 with the norm of not less 40%, and short-term liquidity of PJSC «MEGABANK» has even exceeded the average of this indicator on the system (table 2).

Table 2

Key norms of PJSC «MEGABANK» according to the results of the H1 of 2013

th. UAH, %, p.p.

Norms	The norm set by NBU	01.07.2013		01.01.2013		Change, th. UAH, p.p.
		The Bank’s norm	The average of the system	The Bank’s norm	The average of the system
Regulatory capital (N1), th. UAH	Not less than UAH 120 000 th.	705067	-	738792	-	-33725
Regulatory capital adequacy (N2), %	Not less 10%	15.03%	17.99%	16.89%	18.06%	-1.86 p.p.
Regulatory capital/Total assets ratio (N3), %	Not less 9%	13.41%	14.01%	15.62%	14.89%	-2.21 p.p.
Instant liquidity (N4), %	Not less 20%	50.33%	55.97%	51.42%	69.26%	-1.09 p.p.
Current liquidity (N5), %	Not less 40%	57.70%	88.64%	69.02%	79.09%	-11.32 p.p.
Short-term liquidity (N6), %	Not less 60%	94.87%	90.28%	94.92%	90.28%	-0.05 p.p.
Norm of large loan risks (N8), %	Not more 800%	202.96%	179.42%	162.54%	172.91%	40.42 p.p.
Norm of the maximum amount of loans, guarantees and sureties, issued to the insiders (N10), %	Not more 30%	5.54%	1.93%	5.57%	2.41%	-0.03 p.p.

Source: data of PJSC «MEGABANK», NBU, calculations by RA «Expert-Rating»

3. In the H1 of 2013 net profit of PJSC «MEGABANK» has amounted to UAH 5,505 mln that is by 1,27% more than in the H1 of 2012. Dynamics of key income articles of the Bank has been more confident. Thus, net interest income in the H1 of 2013 has been by 14,49% more, than in the H1 of 2012, and net commission income has shown the growth rate of 2,71%.

As a whole, the increase in net interest income, net commission income and net profit of PJSC «MEGABANK», in the Agency’s opinion, is key achievement of the Bank in the H1 of 2013 and confirms the loyalty of the development strategy, which is implemented by the Bank’s management.

Table 3

Separate indicators of income and expenses of PJSC «MEGABANK» in the H1 of 2012–2013

th. UAH, %, p.p.

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

Therefore, PJSC «MEGABANK» has entered the third quarter of 2013 with a significant increase in equity, liabilities, customer credits and debt, including reserves. At the same time, the Agency notes a slight correction of equity and liquidity norms, which on 01.07.2013 have complied with significant reserve to the limit, set by NBU. The Agency highly appreciates a significant increase in key articles of the Bank’s income and believes that it is the politics on optimization of liquidity and capital adequacy of the Bank has resulted in the increase in key articles of the Bank’s income and net profit against the background of the overall fall of business activity in economics of Ukraine in the H1 of 2013.

 

Analytical service of RA «Expert-Rating»

Confirmation of PJSC «MEGABANK» (english version) - 19.08.2013