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PRESS-RELEASE: The credit rating of PJSC «CREDIT AGRICOLE BANK» is confirmed at the level uaAA+


04/09/2012

PRESS-RELEASE

(Translation from Russian)

The credit rating of PJSC «CREDIT AGRICOLE BANK» is confirmed at the level uaAA+

 

August 30, 2012 the rating committee of RA «Expert-Rating» has decided to confirm the credit rating of PJSC «CREDIT AGRICOLE BANK» and the Bank’s bonds of Series А and В at the level uaAA+ according to the national scale. The borrower with rating uaAA+ is characterized by a very 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 «CREDIT AGRICOLE BANK»

in the 1 half of 2012, th. UAH, %, p.p.

Indicators

 01.07.2012

 01.01.2012

Change

Growth rate, %

Shareholders’ equity

731 141

719 973

11 168

1,55%

Authorized capital

1 050 000

1 050 000

0

0,00%

Shareholders’ equity/Assets ratio, %

9,94%

10,51%

-0,57 p.p.

-

Total liabilities

6 622 941

6 127 885

495 056

8,08%

Including liabilities in foreign currency

3 094 498

3 087 415

7 083

0,23%

Funds of banks

1 504 973

2 105 683

-600 710

-28,53%

Funds of individuals

2 967 857

2 360 767

607 090

25,72%

Funds of legal entities

1 616 096

1 256 814

359 282

28,59%

Total assets

7 354 082

6 847 858

506 224

7,39%

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

1 048 955

1 265 139

-216 184

-17,09%

Customer credits and debt

5 781 021

5 024 065

756 956

15,07%

Including customer credits and debt in foreign currency

2 260 684

1 842 676

418 008

22,68%

Loan provisions

(487 915)

(503 616)

-15 701

-3,12%

Loan provisions/ customer credits and debt ratio, %

8,44%

10,02%

-1,58 p.p.

-

Securities (Securities for sale + Securities for redemption)

23 359

66 345

-42 986

-64,79%

Liquid assets/Liabilities ratio, %

15,84%

20,65%

-4,81 p.p.

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

           1. In the period from 01.01.2012 to 01.07.2012 Bank’s assets have increased by 7,39% (from UAH 6,848 bn up to UAH 7,354 bn), liabilities have grown by 8,08% up to UAH 6,623 bn, shareholders’ equity has increased by 1,55% and as of 01.07.2012 has reached UAH 731,1 mln. Against the background of the established tendency of reducing the loan portfolio of Ukrainian banks, PJSC «CREDIT AGRICOLE BANK» has continued to increase the volumes of lending, strengthening its positions in this market segment of banking services. Thus, as of 01.07.2012 according to the Bank’s statements, its balance sheet article «customer credits and debt» has amounted to UAH 5,781 bn that is by 15,07% or by UAH 756,9 mln more than as of 01.01.2012.

           2. In the 1 half of 2012 CREDIT AGRICOLE BANK has successfully increased its presence in the market of deposits of legal entities as well as of individuals. Thus, in the period from 01.01.2012 to 01.07.2012 funds, raised by the Bank from individuals, have grown by 25,72% or by UAH 607,1 mln up to UAH 2,968 bn, funds of legal entities have increased by 28,59% or by UAH 359,3 mln and have amounted to UAH 1,616 bn. Total amount of funds, raised by the banks of Ukraine from individuals, has increased by 10,47% in the average in the same period, and funds of legal entities have reduced by 6,85%. A significant excess of growth rates of deposits of individuals and legal entities of the Bank over the average market rate indicates an increase of the market share of PJSC «CREDIT AGRICOLE BANK» in these markets, which are key for the banking system of the country.

As of 01.07.2012 key components of the Bank’s liabilities have occupied the following proportions: funds of individuals – 44,81% (as of 01.01.2012 – 38,52%), funds of legal entities – 24,40% (as of 01.01.2012 – 20,51%), funds of banks – 22,72% (as of 01.01.2012 – 34,36%). The Agency positively estimates the changes in the resource base of PJSC «CREDIT AGRICOLE BANK».

            3. A good level of capitalization has enabled PJSC «CREDIT AGRICOLE BANK» to increase assets with higher rates in comparison with the dynamics of increasing its capital, due to that there has been some decrease in the capital adequacy norms of the Bank. Thus, as of 01.07.2012, compared to 01.01.2012 the norm of the regulatory capital adequacy (N2) has decreased from 15,60% down to 12,50% (with the norm – not less 10%), and the norm of the ratio of regulatory capital to total assets (N3) has decreased by 1,10 p.p. down to 12,97% (with the required norm – not less 9%). At the same time, in the nearest future the Agency expects a significant increase in the authorized capital of PJSC «CREDIT AGRICOLE BANK», which will be the consequence of the merger with another one subsidiary of French financial group Credit Agricole – PJSC «Corporative and Investment Bank Credit Agricole» (hereinafter – PJSC «CIB Credit Agricole»). The decision about the merger of two banking institutions has been made on July 2, 2012 at the extraordinary general shareholders meeting of PJSC «CREDIT AGRICOLE BANK». As a result of merger PJSC «CIB Credit Agricole» will cease its activity and transfer its assets, rights and liabilities to PJSC «CREDIT AGRICOLE BANK». The conditions of merger also include increasing the authorized capital of PJSC «CREDIT AGRICOLE BANK» in the amount of the authorized capital of PJSC «CIB Credit Agricole» (UAH 172,929 mln), resulting in the authorized capital of the Bank-successor reaches UAH 1,223 bn. PJSC «CIB Credit Agricole» (untill 2010 – «Kalyon Bank Ukraine») started its activity in Ukraine in 1993 and mainly specializes in serving large corporate clients. As of 01.07.2012 assets of PJSC «CIB Credit Agricole» have amounted to UAH 3,949 bn, liabilities – UAH 3,381 bn, net profit of the Bank has amounted to UAH 145,639 mln according to the results of the 1 half of 2012.

Table 2

Key norms of PJSC «CREDIT AGRICOLE BANK» 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.           

1 010 427

-

995 558

-

14 869

Regulatory capital adequacy (N2), %

Not less 10%

12,50%

17,98%

15,60%

19,20%

-3,10 p.p.

Regulatory capital/Total assets ratio (N3), %

Not less 9%

12,97%

14,58%

14,07%

14,65%

-1,10 p.p.

Instant liquidity (N4), %

Not less 20%

40,57%

52,75%

66,92%

54,30%

-26,35 p.p.

Current liquidity (N5), %

Not less 40%

44,94%

70,75%

47,37%

73,02%

-2,43 p.p.

Short-term liquidity (N6), %

Not less 60%

73,02%

94,46%

67,29%

89,34%

5,73 p.p.

Norm of large loan risks (N8), %

 Not more 800%

85,08%

 178,68%

64,83%

148,37%

20,25 p.p.

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

Not more 30%

1,12%

2,99%

0,74%

2,36%

0,38 p.p.

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

             4. The active position of PJSC «CREDIT AGRICOLE BANK» in the lending market has enabled to increase the efficiency of using the resource base that, respectively, has impacted the decrease in the excessive level of some liquidity indicators of the Bank. Thus, as of 01.07.2012, compared to 01.07.2011 the norm of instant liquidity of the Bank (N4) has decreased by 26,35 p.p.: from 66,92% down to 40,57%, with the boundary norm – not less 20%. The norm of current liquidity of the Bank (N5) has decreased by 2,43 p.p. down to 44,94% (with the norm – not less 40%), at the same time, the norm of short-term liquidity of the Bank (N6), in contrast, has increased by 5,73 p.p.: from 67,29% up to 73,02% (with the required norm – not less 60%).

              5. The quality of assets of PJSC «CREDIT AGRICOLE BANK» has been at a rather high level. The dynamics of indicators of the quality of the Bank’s loan portfolio has demonstrated a stable trend of reducing its risk level. In the period from 01.01.2012 to 01.07.2012 loan provisions have reduced by 3,12% with the growth rate of customer credits and debt at the level 15,07%. Respectively, the ratio of loan provisions to the Bank’s loan portfolio has decreased by 1,58 p.p. As a whole, on the banking system of Ukraine there has been an inverse trend – the average of this indicator has increased from 18,16% up to 20,54% in the same period.

Table 3

Indicators of income and expenses of PJSC « CREDIT AGRICOLE BANK » in the 1H of 2011-2012, th. UAH, %, p.p.

Indicators

The 1 half of 2012

The 1 half of 2011

Change

Growth rate, %

Net interest income

142 221

157 365

-15 144

-9,62%

Net commission income

117 963

77 206

40 757

52,79%

Net commission income/ Net interest income ratio

82,94%

49,06%

33,88 p.p.

-

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

0

0

0

-

Result from operations with foreign currency

15 476

12 237

3 239

26,47%

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

(37 409)

4 027

-

-

Administrative and other operating expenses

(271 903)

(266 151)

5 752

2,16%

Net profit

4 745

25 833

-21 088

-81,63%

ROE, %

0,65%

3,59%

-2,94

-

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

             6. In the 1 half of 2012 the bank’s activity has remained profitable. According to the results of the 1 half of 2012 the financial result of PJSC «CREDIT AGRICOLE BANK» has amounted to UAH 4,745 mln of net profit that is by 81,63% or by UAH 21,088 mln less than in the same period of last year. The decrease in the Bank’s profit has been influenced by the decrease of net interest income by 9,62% or by UAH 15,144 mln, as well as by the increase in administrative and other operating expenses (by 2,16% or by UAH 5,752 mln), and also by the need to form reserves for impairment of loans and funds in other banks. At the same time, in this period net commission income of the Bank has significantly grown – by 52,79% or by UAH 40,757 mln and according to the results of the 1 half of 2012 it has amounted to UAH 117,963 mln.

7. In the 1 half of 2012 the group Crédit Agricole has significantly improved the capital adequacy indicators. Thus, on 30.06.2012 the capital adequacy of Tier I of Crédit Agricole has amounted to 11,3% that is by 110 basis points more, than at the beginning of 2012. The activity of Crédit Agricole has remained profitable in the second quarter, according to the quarter the group has shown gross operating income of EUR 1,479 bn and net profit of EUR 174 mln.

Therefore, key activity parameters of PJSC «CREDIT AGRICOLE BANK» have demonstrated positive trends of its development in the 1 half of 2012. The growth rates of assets, including the growth rates of the loan portfolio and the Bank’s liabilities have exceeded the average market dynamics. The Bank maintains the quality of the asset portfolio at a rather high level, consistently generates profit, and the indicators of liquidity and capital adequacy of PJSC «CREDIT AGRICOLE BANK» excessively exceed the boundary requirements of the regulator, which is the guarantee of timely performing all the obligations taken by the Bank. After the merger completion of PJSC «CIB Credit Agricole» to PJSC «CREDIT AGRICOLE BANK», the Agency expects a significant increase in key performance indicators of the Bank, which will result in a significant strengthening of the Bank’s positions in the banking system of Ukraine.

 

Analytical service of RA «Expert-Rating»

Confirmation of PJSC «CREDIT AGRICOLE BANK» (english version) - 30.08.2012

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