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
September07 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 ofPJSC «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%
Loanprovisions/ customercreditsanddebtratio, %
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%
Liquidassets/Liabilitiesratio, %
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
KeynormsofPJSC «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 000th.
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.