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OJSC Ukrgasbank |
Fitch Affirms Ukrgasbank ‘B-’; Outlook Stable
Fitch Ratings-London/Moscow-6 June 2008:
Fitch Ratings has today affirmed the ratings of Ukraine’s Ukrgasbank (UGB) at Long-term Issuer Default rating (IDR) ‘B-’ (B minus), National Long-term ‘BBB-(BBB minus)(ukr)’, Short-term IDR ‘B’, Individual ‘D/E’, Support ‘5’ and Support Rating Floor ‘No Floor’. The Outlooks for the Long-term IDR and National Long-term rating are Stable.
The ratings of UGB reflect high credit and operational risks associated with its rapid growth, its high borrower concentrations, low free capital and certain weaknesses in the operating environment. The ratings also consider the bank’s low level of non-performing loans to date, improved profitability and growing franchise.
Upside potential for the ratings would be possible if the bank significantly reduces the concentration of its loan portfolio, builds up its franchise while maintaining satisfactory asset quality and continues to diversify its funding base. Significant credit losses, for example as a result of the fast loan growth, would exert downward pressure on the ratings, as could a further marked tightening of liquidity.
UGB was founded in 1993 and has operated under its current name since 1997. UGB is currently focusing on developing business in the SME and retail segments, while also enhancing further its core corporate business. UGB has a country-wide network, consisting of 19 branches, five sub-branches, 268 outlets and 382 ATMs. As at end-Q108, UGB was the 18th-largest bank in Ukraine, with total assets of UAH11.2bn (USD2.2bn) and a market share of 1.7%. The bank is jointly controlled by Vassiliy Gorbal (48%), a deputy of the state parliament (Verhovnaya Rada), and Alexey Omelyanenko (35%), deputy of the Kiev city parliament (Kiev Rada).
Contact:
Alexander Danilov, James Watson, Moscow, Tel.: +7 495 956 9901.
Media contact:
Alla Izmailova, Moscow, Tel.: + 7 495 956 9901/03, alla.izmailova@fitchratings.com
Fitch changes Ukrainian banks’ rating outlook to negative
Fitch Ratings - London/Moscow
27 November 2008
Fitch Ratings has today changed to Negative from Stable the Outlooks for eleven Ukrainian banks: Privatbank, First Ukrainian International Bank, Bank Credit Dnepr, Industrialbank, Bank Khreschatyk, Kreditprombank, Pivdennyi Bank, Ukrgasbank, Vseukrainsky Aksionerny Bank, Nadra Bank and Bank Diamant
The change in Outlooks reflects Fitch's increased concerns about the credit profiles of Ukrainian banks in light of the renewed sharp depreciation of the national currency, the Hryvnia, or UAH. The official USD/UAH exchange rate has fallen from 1/5.79 on 18 November to 1/6.74 today (a 16% drop), and has fallen further in market trading today. The current official rate already represents a 39% depreciation compared to that of 1 October.
In Fitch's view, UAH depreciation heightens risks for Ukrainian banks in three main areas. Firstly, there is an increased risk of renewed deposit withdrawals as confidence in the banking system ebbs and customers seek to convert UAH into USD, which could put additional pressure on liquidity. Secondly, asset quality is likely to deteriorate more rapidly, in light of the high proportion of lending in foreign currency (50% at end-Q308), often to unhedged borrowers. Thirdly, capital ratios will in many cases fall significantly, as UAH-equivalent balance sheets expand considerably without a corresponding increase in capital.
These effects add to the already significant liquidity and asset quality risks for Ukrainian banks. Liquidity has tightened significantly during the last two months as a result of considerable deposit outflow (a 9% reduction of corporate UAH deposits and a 10% fall in retail UAH deposits in October) and the drying up of the interbank market. Reported asset quality has been reasonable at most banks to date, but a sharp slowdown in economic activity and the seasoning of loan books which have been built up very rapidly in recent years are likely to result in a significant increase in loan impairment, even before the impact of the UAH depreciation.
OJSC UkrGasBank
- Long-term foreign currency IDR: affirmed at 'B-' (B minus); Outlook changed to Negative from Stable
- Short-term foreign currency IDR: affirmed at 'B'
- Individual rating: affirmed at 'D/E'
- Support rating: affirmed at '5'
- Support Rating Floor: affirmed at 'No Floor'
National Long-term rating: affirmed at 'BBB-' (BBB minus)(ukr); Outlook changed to Negative from Stable
Fitch Downgrades IDRs of Four Ukrainian Banks
Fitch Ratings - London/Moscow
26 January 2009
Fitch Ratings has today downgraded the Long-term Issuer Default Ratings (IDRs) of four Ukrainian banks: Kreditprombank, Ukrgasbank and Vseukrainsky Aksionerny Bank to ‘CCC’ from ‘B-’ (B minus) and Rodovid Bank to ‘CC’ from ‘CCC’. The agency has also downgraded the National Long-term rating of Bank Diamant and the Individual rating of Swedbank (Ukraine). At the same time, the ratings of seven other Ukrainian banks - Privatbank, First Ukrainian International Bank (FUIB), Bank Credit Dnepr (BCD), Bank Khreschatyk, Industrialbank, Pivdennyi Bank and Bank Forum – are affirmed. The Outlooks on the Long-term IDRs (where assigned) of all of the above mentioned banks are Negative.
In Fitch’s view, the downgraded banks are most exposed to these risks in light of the growth-focused strategies pursued in recent years and the deterioration already evident in asset quality, capital and/or liquidity metrics at those institutions. At the same time, the Negative Outlooks on the ratings of all of the domestically-owned banks reflect the potential for further downgrades, including of banks which have today been affirmed, as the tough operating environment continues to negatively impact banks’ asset quality, capital and liquidity.
OJSC Ukrgasbank:
- Long-term IDR: downgraded to 'CCC' from ‘B-’ (B minus); Outlook Negative
- Short-term IDR: downgraded to 'C' from ‘B’
- Individual rating: downgraded to 'E' from ‘D/E’
- Support rating: affirmed at '5'
- Support Rating Floor: affirmed at 'No Floor'
- National Long-term rating: downgraded to 'BB(ukr)’ from ‘BBB-(ukr)’ (BBB minus (ukr)); Outlook Negative
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