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Global Credit Research |
Credit Opinion: Ukrgasbank
Ukrgasbank
Kiev, Ukraine
Ratings
Category Moody's Rating
Outlook Stable
Bank Deposits B2/NP NSR
Bank Deposits-Dom Curr A2.ua/--
Bank Financial Strength E+
Contacts
Analyst Phone
Elena Redko/Moscow 7.495.641.1881
Yana Ruvinskaya/Moscow
Reynold R. Leegerstee/London 44.20.7772.5454
SUMMARY RATING RATIONALE
Moody's assigns a bank financial strength rating (BFSR) of E+ to Ukrgasbank's which translates into a Baseline Credit Assessment of B2. The rating derives from the bank's (i) limited corporate banking franchise, (ii) relatively low, albeit improving, level of recurring profitability and efficiency, (iii) high concentration of the loan book, (iv) unseasoned nature of its growing retail loan portfolio and (v) relatively low level of economic capital given its risk profile of a corporate bank. The ratings also factor in (i) the bank's strategy of diversification into retail business, (ii) growing distribution network, (iii) reasonable asset quality and (iv) the efforts the bank is making to improve its corporate governance and risk management practices. Ukrgasbank's B2/NP Global Local Currency (GLC) deposit ratings does not incorporate any probability of systemic support, due to its still small market share and low importance to banking system as a whole.
Credit Strengths
- Strategy focuses on manageable growth in segments and products of the bank's priority
- A strengthening domestic franchise and growing retail operations supported by growing distribution capacity
- Ambitious management team which sharply turned the bank around
- Improving corporate governance and risk management practices by deep involvement into the process of independent directors
- Acceptable asset quality, though not yet tested by a cyclical downturn
- Increasing territorial coverage
- Strengthening albeit not sufficient to keep pace with assets growth internal capital generation capacity
Rating Outlook
All ratings assigned to Ukrgasbank carry a stable outlook.
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