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PRESS-RELEASE: The credit rating of PJSC «BROKBUSINESBANK» is confirmed at the level uaAA


10/09/2012

PRESS-RELEASE

(Translation from Russian)

The credit rating of PJSC «BROKBUSINESBANK» is confirmed at the level uaAA

 

            September 07 of 2012, RA «Expert-Rating» has decided to confirm the credit rating of PJSC «BROKBUSINESBANK» and the Bank’s bonds of Series B at the level uaAA according to the national scale. The borrower with rating uaAA is characterized by a high solvency in comparison with other Ukrainian borrowers. Making decision about confirming the credit rating according to the national scale, the Agency was guided by the results of the Bank’s activity in the 1 half of 2012.

Table 1

Key balance sheet indicators of PJSC «BROKBUSINESBANK» in the 1 half of 2012, th. UAH, %, p.p.

Indicators

 01.07.2012

 01.01.2012

Change

Growth rate, %

Shareholders’ equity

2 916 135

2 427 598

488 537

20,12%

Authorized capital

2 504 160

2 030 400

473 760

23,33%

Shareholders’ equity/Assets ratio, %

13,30%

12,82%

0,48 p.p.

-

Total liabilities

19 013 689

16 514 219

2 499 470

15,14%

Including liabilities in foreign currency

10 132 817

8 459 227

1 673 590

19,78%

Funds of banks

5 059 000

3 579 849

1 479 151

41,32%

Funds of individuals

8 111 459

7 328 099

783 360

10,69%

Funds of legal entities

4 451 412

4 262 599

188 813

4,43%

Total assets

21 929 824

18 941 817

2 988 007

15,77%

Liquid assets (Cash and cash equivalents + Trading securities + Funds in other banks)

4 008 874

3 241 781

767 093

23,66%

Customer credits and debt

14 101 169

12 782 161

1 319 008

10,32%

Including customer credits and debt in foreign currency

3 632 244

3 253 741

378 503

11,63%

Loan provisions

(714 828)

(728 173)

-13 345

-1,83%

Loan provisions/ customer credits and debt ratio, %

5,07%

5,70%

-0,63 p.p.

-

Securities (Securities for sale + Securities for redemption)

450 276

436 131

14 145

3,24%

Securities provisions (for sale + for redemption)

(6 610)

(10 435)

-3 825

-36,66%

Liquid assets/Liabilities ratio, %

21,08%

19,63%

1,45 p.p.

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

1. In the 1 half of 2012 BROKBUSINESBANK has demonstrated a good dynamics of development. In the period from 01.01.2012 to 01.07.2012 the Bank’s assets have increased by 15,77% or by UAH 2,988 bn up to UAH 21,930 bn, while the average growth rate of assets of the Ukrainian banks has amounted to only 4,75% in the same period according to the Agency. BROKBUSINESBANK has distinguished by a high level of business activity in the lending market in spite of the still prevailing downward trend of lending activity in the banking system of Ukraine. Thus, the loan portfolio of the Bank has grown by 10,32% or by UAH 1,319 bn since the beginning of the year and as of 01.07.2012 has amounted to UAH 14,101 bn.

2. In the 1 half of 2012 the Bank has successfully increased the resource base. Thus, in the period from 01.01.2012 to 01.07.2012 the Bank’s liabilities have increased by 15,41% or by UAH 2,499 bn, up to UAH 19,014 bn. Funds of individuals have grown by 10,69% or by UAH 783,4 mln, up to UAH 8,111 bn, and funds of legal entities have increased by 4,43% or by UAH 188,8 mln and have amounted to UAH 4,451 bn as of 01.07.2012. As a result, as of 01.07.2012 the structure of liabilities of PJSC «BROKBUSINESBANK» has been distributed as follows: funds of individuals have occupied 42,66% of total liabilities of the Bank ( as of 01.01.2012 – 44,37%), the proportion of legal entities has amounted to 23,41% (as of 01.01.2012 – 25,81%), the proportion of the bank’s funds have accounted for 26,61% (as of 01.01.2012 – 21,68%). As a whole, the Agency appreciates the diversification level of the resource base maintained by the Bank.

3. Since the beginning of 2012 the shareholders’ equity of PJSC «BROKBUSINESBANK» has increased by 20,12% or by UAH 488,5 mln and has reached UAH 2,916 bn as of 01.07.2012. The increase in equity has been due to the increase in the authorized capital by the Bank’s shareholders through private offering the additional share issue of UAH 473,8 mln. At the same time, due to the repayment of the subordinated debt, the regulatory capital of the Bank (in the period from 01.07.2011 to 01.07.2012) has increased by only 3,47% or by UAH 96,5 mln. As a result of increasing the assets the higher rates, compared to the growth of regulatory capital, which is the basic indicator at the calculation of the norms N2 and N3, there has been some decrease in these norms, while they still excessively exceed the boundary limits set by NBU. Thus, as of 01.07.2012 compared to 01.07.2011 the Bank’s norm of regulatory capital adequacy has decreased by 2,87 p.p. and has amounted to 14,96% with the boundary indicator of not less 10%. In the same period the norm of the ratio of regulatory capital to total assets (N3) has decreased by 1,85 p.p.: from 14,82% down to 12,97% at the norm of not less 9%.

Table 2

Key norms of PJSC «BROKBUSINESBANK» in the 1 half of 2012

Norms

Norm, set by NBU

01.07.2012

01.07.2011

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 UAH 120 000 th.

2 878 452

-

2 781 942

-

96 510

Regulatory capital adequacy (N2), %

Not less 10%

14,96% 

17,98%

17,83% 

19,20%

-2,87 p.p.

Regulatory capital/Total assets ratio (N3), %

Not less 9%

12,97%

14,58%

14,82%

14,65%

-1,85 p.p.

Instant liquidity (N4), %

Not less 20%

29,30% 

52,75%

95,30% 

54,30%

-66,00 p.p.

Current liquidity (N5), %

Not less 40%

79,41% 

70,75%

86,50% 

73,02%

-7,09 p.p.

Short-term liquidity (N6), %

Not less 60%

86,80% 

94,46%

75,54% 

89,34%

11,26 p.p.

Norm of large loan risks (N8), %

 Not more 800%

289,64% 

 178,68%

218,65%  

148,37%

70,99 p.p.

Norm of the maximum amount of loans, guarantees and sureties, issued to the insiders (N10), %

Not more 30%

3,83%  

2,99%

6,16% 

2,36%

-2,33 p.p.

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

                4. The increase in the Bank’s business activity has resulted in the decrease of the excessively high norm of instant liquidity (N4): from 95,30% as of 01.07.2011 down to 29,30% as of 01.07.2012 (with the boundary norm of not less 20%). The norms of current and short-term liquidity (N5 and N6) demonstrate a good level of balance of the Bank’s assets and liabilities with the maturities of less one month (N5) and less one year (N6). Thus, as of 01.07.2012 N5 has amounted to 79,41% (the required norm – not less 40% and the average on the banking system – 70,75%), and N6 has been at the level 86,80% (the norm – not less 60% and the average on the system – 94,46%).

   5. The quality of the loan portfolio of PJSC «BROKBUSINESBANK» has been at a sufficient level. The Agency notes a relatively low concentration of customer debt in foreign currency in the loan portfolio of the Bank: as of 01.07.2012 the proportion of loans in foreign currency, provided by the Bank, has amounted to 25,76%.

Table 3

Indicators of income and expenses of PJSC «BROKBUSINESBANK» in the 1 half of 2011-2012, th. UAH, %, p.p.

Indicators

The 1 half of 2012

The 1 half of 2011

Change

Growth rate, %

Net interest income

(41 266)

137 894

-

-

Net commission income

98 626

97 180

1 446

1,49%

Net commission income/ Net interest income ratio

-

70,47%

-

-

Result from operations with securities in the trading portfolio of the bank

-

209

 

 

Result from operations with foreign currency

173 452

16 092

157 360

977,88%

Deductions into provisions for impairment of loans and funds in other banks

2 799

(13 773)

-

-

Administrative and other operating expenses

(218 100)

(207 080)

11 020

5,32%

Net profit

3 392

24 313

-20 921

-86,05%

ROE, %

0,12%

1,00%

-0,89 p.p.

-

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

             6. In the 1 half of 2012 the Bank’s activity has remained profitable. During the first 6 months of 2012 net profit of the Bank has amounted to UAH 3,392 mln that is by 86,05% less, than according to the results of the same period of 2011. The reduction in the liquidity excess, which we’ve observed in the 1 half of 2012, must positively impact on the dynamics of net interest income in future. PJSC «BROKBUSINESBANK» has managed to significantly increase the financial result from operations with foreign currency, which has grown according to the results of the 1 half of 2012, compared to the respective period of 2011. Net commission income of the Bank has increased by 1,49% or by UAH 1,446 mln in the same period and has reached UAH 98,6 mln.

Therefore, the analysis of key performance indicators of PJSC «BROKBUSINESBANK» has demonstrated the positive trends of its development according to the results of the 1 half of 2012. The growth rates of the Bank’s assets and liabilities, exceeding the average market dynamics, are backed by a significant increase of its authorized capital. At the same time, the Bank’s activity remains profitable and the Bank maintains the quality of the loan portfolio at a good level. And a sufficient reserve of solvency and liquidity enables the Bank to timely and fully meet its obligations to depositors and other counterparties.

 

Analytical service of RA «Expert-Rating»

Confirmation of PJSC «BROKBUSINESBANK» (english version) - 07.09.2012

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