On November, 15th, 2012 the rating committee of RA Expert Rating decided on confirmation of the credit rating of PJSC BROKBUSINESSBANK (USREOU code 19357489) and Bank bonds of B series according to the national scale at the level uaAA. The borrower with the rating uaAA is characterized by high credit status compared versus other Ukrainian borrowers. When taking decision on the confirmation of the credit rating according to the national scale, the Agency was guided by main results of the work of Bank for 9 months of 2012.

Table 1

Key balance sheet indicators of PJSC BROKBUINSESSBANK for 9 m 2012, UAH th., %, p.p.

th. UAH, %, p.p.

Source: data by PJSC BROKBUINSESSBANK, calculation by RA Expert Rating

1. In Q3 2012 key indicators of PJSC BROKBUSINESSBANK activity have shown multidirectional dynamics. As of 01.10.2012 Bank assets have constituted UAH 17,599 billion, that is on 7,09 % less, than as of 01.01.2012. During the period from 01.01.2012 to 01.10.2012 quick assets were reduced to 55,43 %, in particular, the volume of the funds placed by PJSC BROKBUSINESSBANK in other banks, decreased by 60,9 % (from UAH 1,545 billion  to UAH 604,3 million ). Thus economy crediting still remains a priority direction of placement of resources attracted by the Bank. So, the credit portfolio of PJSC BROKBUSINESSBANK from the beginning of the current year has increased by 10,16 % and as of Q3 end constituted UAH 14,080 billion, whereas the total volume of credits and indebtedness of clients of the Ukrainian banks for the same period increased only by 1,25 %. Thus the portfolio of the credits issued by the Bank to legal entities, for the analyzed period increased by 13,97 % - to UAH 11,377 billion, at the same time the volume of credits and debts of natural persons reduced to 3,45 %, and as of 01.10.2012 has constituted UAH 2,703 billion

2. As of 01.10.2012 the liabilities of PJSC BROKBUSINESSBANK have constituted UAH 14,690 billion, that is on 11,05 % less, than as of 01.01.2012. Reduction of Bank liabilities was caused by essential reduction of the funds attracted at interbank market which volume during the period from 01.01.2012 to 01.10.2012 reduced to 40,44 % or by UAH 1,448 billion - to UAH 2,132 billion  At the same time two other key components of resource base of Bank (funds of natural and legal persons) have shown positive dynamics of growth. So, the funds of natural persons increased by 5,36 % or on UAH 392,5 million, and as of 01.10.2012 have constituted UAH 7,721 billion, and the volume of funds of legal entities grew on 2,39 % or on UAH 101,9 million  - to UAH 4,365 billion  As a whole, the Agency positively estimates the changes occurred in the structure of resource base of PJSC BROKBUSINESSBANK as they are directed on the further improvement of its diversification level and reduction of the share of interbank credits in Bank liabilities.

3. The shareholders of PJSC BROKBUSINESSBANK once more within a year have raised Bank authorized capital. In Q3 2012 decision was taken on increase of the authorized capital at the expense of capitalization of 87,45 % of net profit of the Bank for 2011 (UAH 19,980 million). As a whole, during the period from 01.01.2012 to 01.10.2012 the authorized capital of PJSC BROKBUSINESSBANK increased by 24,32 % or on UAH 493,7 million and reached UAH 2,524 billion. As of 01.10.2012 Bank equity has constituted UAH 2,909 billion, that is on 19,85% or on 481,9 million more than on 01.01.2012. The growth of Bank equity has positively affected dynamics of the normative values of the Bank. So, as of 01.10.2012 compared with 03.10.2011 the norm of Bank regulatory capital adequacy (Н2) increased by 1,97 p.p. and has constituted 18,06 % (at required value of not less than 10 %, and average market indicator 18,24 %), and the norm of regulatory capital/total assets ratio (Н3) for the same period has grown on 1,20 p.p. - to 15,70 %, at threshold indicator of ‘not less than 9 %’ and average value on bank system at the level of 14,86 %.

Table 2

Key normative values of PJSC BROKBUINSESSBANK following the results of 9 months 2012

th. UAH, %, p.p.

Source: data by PJSC BROKBUINSESSBANK, NBU, calculation by RA Expert Rating

4. As of 01.10.2012 normative values of PJSC BROKBUSINESSBANK liquidity (Н4, Н5 and Н6) redundantly exceeded NBU requirements to their minimum level. At this the norm of instant bank liquidity (Н4) was the one most close to the threshold established by the regulator of ‘not less than 20 %’. So, as of 01.10.2012 Н4 constituted 26,66 % that is characteristic for large system banks to which category belongs PJSC BROKBUSINESSBANK. At the same time current liquidity specification (Н5) constituted 74,10 % (at required NBU value of not less than 40 %, and an average index in bank system - 78,39 %), and the norm of short-term liquidity (Н6), at threshold value of ‘not less than 60 %’, was at the level of 81,28 %. This statistics proves to that the Bank entered Q4 2012 with a good reserve of liquidity.

5. For 9 months of 2012 the net profit of PJSC BROKBUSINESSBANK has constituted UAH 2,733 million. Thus, KPIs of PJSC BROKBUSINESSBANK following the results of 9 months 2012 have shown multidirectional dynamics. The bank continued to increase shareholders equity, actively attracted resources from natural and legal persons and showed good growth rates of credit portfolio. At this shrinkage of PJSC BROKBUSINESSBANK interbanking activities was observed that was seen from reduction of both placed volumes, and the resources attracted at other banks and, accordingly, it affected indicators of growth rates of Bank assets and liabilities volume. At the same time, despite good level of shareholders’ equity, the shareholders of PJSC BROKBUSINESSBANK continued to capitalize profit, thereby strengthening solvency margin of the bank, which  against adequate liquidity allows it to meet obligations to investors and other counterparts in due time and in full.

Analytical service of RA Expert Rating

Confirmation of PJSC BROKBUSINESSBANK (english version) - 15.11.2012