March 31, 2015 the rating committee of RA “Expert-Rating” has decided to confirm a long-term credit rating of PJSC “VTB BANK” (14359319) and the Bank’s bonds that are in circulation at the level uaAА+ according to the national scale. The Agency also confirms the rating of the Bank’s deposits at the level ua1. The Bank with rating uaAА+ is characterized by a high solvency compared to other Ukrainian banks. 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, its financial, statistical statements, as well as particular and regular information of the Bank as an issuer of securities.

Table 1

Key balance sheet indicators of PJSC «VTB BANK» according to 2014, th. UAH, %, p.p.

Source: data of PJSC “VTB Bank”, calculations by RA «Expert-Rating»

            1. Key balance sheet indicators of PJSC “VTB BANK” according to the results of 2014 have demonstrated the following dynamics:

• Shareholders’ equity has grown by 57.73% up to UAH 5.09 bn;
• Bank’s liabilities have grown by 42.05%, while funds of banks have demonstrated the highest growth rate (129.77%);
• Funds of individuals have decreased by UAH 3.15 bn or by 44.64%, and funds of legal entities have decreased by only 2.32%;
• Customer credits and debt including reserves have grown by 42.23% up to UAH 32.6 bn, while the Bank has decreased loan provisions by 21.67% or by UAH 917.45 mln. 

Due to a growth of funds of banks in liabilities of PJSC “VTB BANK” not only has successfully compensated the outflow of funds of individuals, but also has provided the increase in bank’s commitments in the required volumes. Changes in the structure of Bank’s resource base have been dictated by changes of market conditions with the decrease in the business activity level in Ukraine in a difficult economic period.

            2. According to the results of 2014 dynamics of the equity norms of PJSC “VTB BANK” (N1 and N2) has looked as follows:

• Regulatory capital (N1) has grown by 7.17% up to UAH 4.23 bn;
• Norm of the regulatory capital adequacy (N2) has decreased by 4.47 p.p. down to 10.26% that in general has corresponded to trends of dynamics of the average of N2 on the banking system;

Additionally the Agency has studied dynamics of N2 of PJSC “VTB BANK” in February and also has fixed the further decrease in N2 of the Bank, as well as the average of this normative on the banking system, lower than the limit, set by NBU. But the Agency draws attention that at the end of February of 2015 the general meeting of shareholders of PJSC “VTB BANK” has decided to increase the authorized capital of PJSC “VTB BANK” by UAH 4.2 bn through private offering of additional shares. After the increase the Bank’s authorized capital will amount to UAH 10.8 bn. The decision made by shareholders deserves a positive assessment, since indicates a consistent policy aimed at providing the Bank with external financial support. According to the Agency’s assessments, the increase in the authorized capital by UAH 4.2 bn is sufficient for a considerable increase in the Bank’s N2.

Table 2

Key norms of PJSC «VTB BANK» according to 2014, th. UAH, %, p.p.

Source: data of PJSC “VTB BANK”, NBU, calculations by RA «Expert-Rating»

            Analysis of dynamics of the liquidity norms of PJSC “VTB BANK” for 2014 indicates that the Bank has been provided with liquidity:

• Norm of instant liquidity (N4) has grown by 14.21 p.p. up to 61.03% that has been higher than the average of the market;
• Norm of current liquidity (N5) has decreased by 13.86 p.p., but as of 01.01.2015 has been by 10.21 p.p. higher than the limit, set by NBU;
• Norm of short-term liquidity (N6) has grown by 0.19 p.p. and has amounted to 67.01% that is by 7.01 p.p. higher than the limit, set by NBU.

Additionally the Agency has also studied the dynamics of the liquidity norms of the Bank in February of 2015 and notes a considerable growth of these norms. As of 02.03.2015 instant liquidity of the Bank has amounted to 168.01%, current liquidity 140.55%, and short-term liquidity 63.11%. In March PJSC “VTB BANK” has created a very great reserve of liquidity.

Table 3

Separate indicators of income and expenses of PJSC «VTB BANK» according to 2014, th. UAH, %, p.p.

Source: data of PJSC “VTB BANK”, calculations by RA «Expert-Rating»

           3. In difficult macroeconomic conditions PJSC “VTB BANK” has managed to finish the 2014 year with net profit of UAH 642.8 mln. The Agency notes a decrease in net interest income of the Bank for 2014 compared to 2013 by 15.87% as a negative trend. The Agency attributes the increase in net commission income by 9.82% or by UAH 45.96 mln and the increase in the result from operations with securities in the bank’s trading portfolio by UAH 328.66 mln to a positive trend.

            Therefore, despite a difficult economic period and unfavorable market conditions for conducting banking business in Ukraine, PJSC “VTB BANK” has finished a year with net profit of UAH 642.8 mln. In February of 2015 the Bank’s shareholders have decided to increase the authorized capital of PJSC “VTB BANK” by UAH 4.2 bn that, according to the Agency’s assessments, is sufficient for a noticeable improvement of the Bank’s regulatory capital adequacy. In March of 2015 PJSC “VTB BANK” has created a very good reserve of liquidity. The above factors have enabled the Agency to confirm the Bank’s ratings at a very high level.

Confirmation of the credit rating of PJSC “VTB BANK” - 31.03.2015 (english version)