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Banks |
| Ukraine Credit Analysis |
OJSC Ukrgasbank |
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's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Fitch’s National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated ‘AAA’ and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as ‘AAA(ukr)’ for National ratings in Ukraine. Specific letter grades are not therefore internationally comparable.
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