RA «Expert-Rating» changes the credit rating outlook of PJSC «UKRAINIAN PROFESSIONAL BANK» to positive from neutral

February 15, 2012 RA «Expert-rating» changes the credit rating outlook of PJSC «UKRAINIAN PROFESSIONAL BANK» to positive from neutral. The bank’s credit rating according to the national scale remains at the level uaВВВ+. When confirming the credit rating, the Agency was guided by the results of the Bank’s activity for 2011 (table).

Table

Key performance indicators of PJSC «UKRAINIAN PROFESSIONAL BANK» (th. UAH, %)

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

When confirming the rating, the Agency was based on the following conclusions:

1. The positive growth in all key indicators of the Bank’s activity has been noted according to the results of 2011 comparing to the results of 2010. So, the Bank’s assets have increased by 24,84% and as of 01.01.2012 have exceeded UAH 3 bn., having reached UAH 3,2 bn. At the same time, the average growth rate in assets on the banking system of Ukraine has constituted 11,91% for the same period. The Bank’s liquid assets have increased in more than 2,5 times (by 163,61%) and as of 01.01.2012 have constituted UAH 268,9 mln. The Bank’s loan portfolio has grown by 17,41% for the period from 01.01.2011 to 01.01.2012, while the average growth rate of this indicator on the banking system has constituted 8,44%. Despite the loans provisions, formed by the Bank, have also slightly increased (by 5,14%), as of 01.01.2012 loans provisions/loan portfolio ratio has reduced from 6,36% to 5,7% comparing to 01.01.2011 that is indirectly indicates the relatively low level of the credit risks concentration in the Bank’s portfolio, and at this point reflects the efficiency of the conducting risk-management policy. At the same time, it should be noted that the average market indicator of loans provisions/loan portfolio ratio of the Ukrainian banks has constituted 18,16% according to the results of 2011.

2. As of 01.01.2012 the Bank’s liabilities have constituted UAH 2,6 bn. that is by 30,54% or by UAH 605 mln. more than in the same period of last year. The highest growth rates in the structure of the Bank’s liabilities have been demonstrated by the funds raised from other banks, which have increased by more than in twice (by 112,37%) and have constituted UAH 844,3 mln. as of 01.01.2012. The growth in other components of the resource base looked more modest: funds of legal entities have increased by 1,89% and the growth rate of the funds of individuals has constituted 12,57%. It should be noted that as of 01.01.2012 the greatest share in the structure of the Bank’s liabilities has still occupied by funds of individuals – 42%, the share of funds of legal entities has accounted for 24% of the Bank’s liabilities, while the share of funds raised from other banks has constituted 33%. At the same time, it should be noted that high growth rates and quite significant proportion of funds raised by the Bank in the interbank market indicate a high level of its reputation among other bank institutions and are the reflection of their assessment of PJSC «UKRAINIAN PROFESSIONAL BANK» as a reliable borrower able to perform its undertaken commitments in time.

3. The Bank’s net profit has constituted UAH 87,7 mln. according to the results of 2011, that is by 65,91% more than according to the results of 2010. The high rate of the Bank’s profit growth has been caused, on the one hand, by the positive dynamics of net interest income, which rose by 30,03% and, on the other hand, by the low growth rate of loans provisions, which contributed to the weakening of the pressure on the Bank’s financial result. ROE has increased from 8,83% as of 01.01.2011 up to 13,82% as of 01.01.2012 due to the profit rise by 5 p.p. At the same time, the total financial result of the banking system of Ukraine remains negative following the results of 2011, and the average market growth rate in net interest income of the Ukrainian banks is at the level 3,7% as of 01.01.2012 compared to 01.01.2011.

4. The Bank’s shareholders’ equity has constituted UAH 634,1 mln. as of 01.01.2012 that is by 5,96% more, than the same period of the previous year. At the same time, it should be noted that the Bank has no need for a significant capital increase, because at the present moment its capitalisation is high that, in particular, is indicated by the equity/assets ratio of the Bank, which has constituted 19,69% as of 01.01.2012 that is by 4,94 p.p. more than the average market indicator (14,75%).

Therefore, the analysis of key performance indicators and their dynamics of PJSC «UKRAINIAN PROFESSIONAL BANK» following the results of 2011 in comparison to the results of 2010 has enabled to conclude that 2011 year was successful for the Bank from the point of view in improving its business positions, what is indicated by the growth rates in assets and liabilities exceeding the average market indicators, and from the position of key financial indicators characterizing the stability and efficiency of the Bank’s activity. The outlook change of the Bank’s credit rating to positive from neutral indicates the expectations of RA «Expert-Rating» about increasing the bank’s credit rating to the level uaA- according to the national scale in future.

Analytical department of RA «Expert-Rating»

Full press-release of PJSC "UPB" - 15.02.2012 (english version)