OREANDA-NEWS. January 17, 2008. Uzbek Akhbor-Rating Interbank Rating Company has affirmed Ipak Yuli Bank's solvency rating at "uzA" (national scale), the Banking Association of Uzbekistan reported. The rating is based on the results of the monitoring of the bank's activity in the first nine months of 2007.

The "uzA" rating implies high level of solvency of the Ipak Yuli Open Joint-Stock Innovative Commercial Bank reflecting low level of the credit risk.

Its capability to meet its financial obligations fully and on time is seen as high. However the changes in the commercial, financial and economic conditions may affect the bank's capability to meet its financial obligations to a higher degree compared to the banks rated higher.

The bank's rating takes into account its good client base in the city of Tashkent, continued regional expansion, the adequate level of liquidity and profitability of its operations. The rating also takes into account high concentration of its balance in the country's capital, fast growth of its assets and associated risks, as well as comparatively low level of capitalization contrasted against the bank's active expansion of its operations.

One of the main factors affecting the level of the bank's rating is the favourable macroeconomic environment and the situation in the sector. In particular, the Presidential Resolution No. 726 "On measures to further develop the banking system and attract idle monetary funds into the banking circulation" dated 7 November 2007 is another important step on the way to strengthening the capital base and activating the investment activity of commercial banks, as well as attracting the idle funds of the enterprises into the banking sector.

Ipak Yuli Bank maintains its main competitive advantages which allows it to strengthen its market position. The scale of its active operations is growing at high pace. The size of its credit portfolio is constantly increasing, and the resource base is expanding through the growth of the clients' deposits and the bank's capital base.

As of 1 October 2007 the bank's total assets reached 174 billion soums, having grown by 77% against the same period of the previous year. The market position of the bank in terms of the credit operations gradually improved as a result of the bank's constant efforts to intensify its crediting activity.

In the reporting, the size of the credit portfolio grew by 81%. The priority areas of the bank's lending activity are still industrial sectors of the economy. The volumes of retail loans are increasing. As of 1 October 2007 the loans extended to private clients for consumer purposes made up one fifth of the credit portfolio.

The resource base of the bank is expanding through growth of the funds taken from clients.

The size of the clients' deposits in the bank are expected to continue to growth in light of the Presidential Resolution No. 726 "On measures to further develop the banking system and attract idle funds into the banking circulation." In particular, starting 1 January 2008 the interest earnings of the corporate entities received from the placement of funds on the deposits in banks or invested in securities of the banks for the period of more than one year are exempt from taxes for the period of three years.

The bank's high business activity coupled with the expansion of the range of banking services provided and increase in the volume of credit operations have assisted substantial growth of the bank's revenues. In the first nine months of 2007 the bank's operational earnings grew by 60% compared to the same period of the previous year; net profits doubled.

The bank's shareholders support the strengthening of its capital base. As a result of the additional placement of shares for the total amount of some 2 billion soums the size of the bank's equity capital reached 8.4 billion soums. In November 2007 the shareholders' general meeting decided to increase the bank's equity capital to 13.4 billion soums by floating additional non-cash common stock for the total amount of five billion soums, which would help further expand the scale of the bank's activity.