April 02, 2015 the rating committee of RA “Expert-Rating” has decided to confirm the credit rating of PJSC “CREDIT AGRICOLE BANK” (14361575) and the Bank’s bonds of Series F at the level uaAAА according to the national scale. The borrower with rating uaAAА is characterized by the highest solvency compared to other Ukrainian borrowers. Making decision to confirm the credit rating according to the national scale, the Agency was guided by the key results of the Bank’s activity for 2014, regular and particular information of the Bank as an issuer, as well as by separate forms of statistical statements of the Bank for January-February of 2015.

1.  Key balance sheet indicators of PJSC «CREDIT AGRICOLE BANK» for 2014 have demonstrated the following trends:

• Shareholders’ equity of the Bank has decreased by 15.13% down to UAH 1.41 bn;
• Liabilities of the Bank in hryvnia equivalent have grown by UAH 7.27 bn or by 58.71% up to UAH 19.67 bn, while funds of banks have grown by 30.63%, funds of individuals – by 14.76%, and funds of legal entities – by 89.13%;
• Customer credits and debt of the Bank including reserves have grown in hryvnia equivalent by 37.19%. At the same time, the Bank has increased loan provisions by UAH 1.3 bn.

Table 1

Key balance sheet indicators of PJSC «CREDIT AGRICOLE BANK» for 2014  

th. UAH, %, p.p.

Source: data of PJSC «CREDIT AGRICOLE BANK», calculations by RA «Expert-Rating»

2. Dynamics of balance sheet indicators of PJSC «CREDIT AGRICOLE BANK» has reflected in the change of the Bank’s norms. For the period from 01.01.2014 to 01.01.2015 the Bank’s regulatory capital has grown by UAH 262.77 mln or by 13.16%. At the same time, the regulatory capital adequacy (N2) has decreased by 1.97 p.p. The normative N2 of the Bank on 01.01.2015 has been lower than the average of the system, but has had a reserve of 3.82 p.p. to the limit, set by NBU.

The Agency has also studied the report on the Bank’s norms compliance for February of 2015 and has established that as of 02.03.2015 the Bank’s N2 has amounted to 10.08% that is by only 0.08 p.p. higher than the limit. But the Agency draws attention that the average of N2 on the banking system of Ukraine at the beginning of March has amounted to 7.37%, i.e. lower than the limit, set by NBU. Therefore, PJSC «CREDIT AGRICOLE BANK» even in the period difficult for the banking system has met the normative N2.

3. As of 01.01.2015 all the three liquidity norms of PJSC «CREDIT AGRICOLE BANK» have been higher than the averages on the banking system and have shown a synchronous dynamics of growth with respect to its values on 01.01.2014. The study of dynamics of the Bank’s norms for February has shown that on 02.03.2015 instant liquidity (N4) of the Bank has amounted to 54.87%, current liquidity (N5) 77.73%, short-term liquidity (N6) 99.07%. At the same time, at the beginning of March of 2015 N4 has been by only 3.07 p.p. lower than the average on the system, and N5 and N6 – have significantly exceeded the averages on the system. These trends indicate that at the beginning of 2015 the Bank has formed a good reserve of liquidity on norms of instant, current and short-term liquidity.

Table 2

Key norms of PJSC «CREDIT AGRICOLE BANK» according to the results of 2014

th. UAH, %, p.p.

Source: data of PJSC «CREDIT AGRICOLE BANK», NBU, calculations by RA «Expert-Rating»

4. For 2014 net profit of the Bank has amounted to UAH 90.42 mln that is by 75.48% less than for 2013. The decrease in the annual volume of net profit has been caused by the trends in the currency market and the additional formation of the Bank’s reserves on active operations. At the same time, the Agency draws attention that key indicators of income of the Bank for 2014 in hryvnia equivalent have demonstrated a noticeable growth: net interest income has grown by 67.75%, net commission income has increased by 24.93%, result from operations with national currency has grown in 6.3 times. A noticeable increase in key revenues for 2014 and the fact of profitable activity of the Bank in difficult economic conditions deserve a positive assessment.

Table 3

Separate indicators of income and expenses of PJSC «CREDIT AGRICOLE BANK»

according to the results of 2014

th. UAH, %, p.p.

Indicators	For 2014	For 2013	Change	Growth rate, %
Net interest income	1 467 952	875 070	592 882	67.75%
Net commission income	379 495	303 774	75 721	24.93%
Net commission income/ Net interest income ratio	25.85%	34.71%	-8.86 p.p.	-
Result from operations with foreign currency	456 338	72 072	384 266	533.17%
Administrative and other operating expenses	939 463	699 242	240 221	34.35%
Net profit	90 416	368 745	-278 329	-75.48%
ROE, %	6.40%	22.14%	-15.74 p.p.	-

Source: data of PJSC «CREDIT AGRICOLE BANK», calculations by RA «Expert-Rating»

5. In February of 2015 Credit Agricole Group announced the results for the fourth quarter of 2014 and for the full year. Net income (Group share) reached EUR 4.9 bn for Credit Agricole Group and EUR 2.3 bn for Credit Agricole S.A. If you do not take into account the influence of the “Banco Espirito Santo”, net income of Credit Agricole Group (Group share) amounted to EUR 6 bn that is the highest indicator since 2007.

In 2014 the financial stability of the Group intensified. Indicators of its liquidity have considerably improved: full coefficient CET1 has grown up to 13.1% from 11.3% in January of 2014. Liquidity indicators improved with a surplus of long-term financing resources, which amounted to EUR 101 bn.

Successful activity of Credit Agricole Group on a global scale and significant volumes of the Group’s operations clearly indicated the possibility of providing its subsidiary bank in Ukraine with an unprecedented high level of external support.

Therefore, the activity of PJSC «CREDIT AGRICOLE BANK» in 2014 has remained profitable. The Bank, following a general trend, has decreased the norm of the capital adequacy N2 for 2014, however already at the beginning of March has recovered its value at the level higher than the average on the market. As well, PJSC «CREDIT AGRICOLE BANK» has been well provided with liquidity. And the excellent work results of Credit Agricole Group in 2014 enhance the effect of a high level of external support, which if necessary the Group can provide to its business in Ukraine.

Confirmation of the Credit rating of PJSC «CREDIT AGRICOLE BANK» - 02.04.2015 (english version)