OREANDA-NEWS. June 18, 2010. Credit-Rating, a nationally recognized credit rating agency in Ukraine has announced that it upgraded to uaBBB+ (uaBBB plus) with stable outlook from uaBBB the long-term credit rating assigned to Lviv-based KREDOBANK OJSC (‘bank’). To revise the rating Credit-Rating considered bank’s financial statements for 2008-2009 and 1Q2010 and its other inside information.

An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is affected by adverse changes in commercial, financial and economic conditions. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).

Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.

Factors maintaining the credit rating

The bank may get necessary backing in case of necessity from its primary owner (Poland-domiciled PKO BP S.A.), which is one of the biggest Poland’s banks.

The bank’s loan portfolio is well diversified by primary borrowers (the loans granted to 20 biggest borrowers contribute to 22.6% of the bank’s customer loan portfolio).

Rise in bank’s liquidity indicators combined with anticipated increase of the bank’s authorized stock.

The bank’s branch network is wide-spread with the card segment sufficiently developed, which contributes to preserving of the bank’s clientele and competitive standing.

Diversification of the bank’s resources.

Factors constraining the credit rating

Bank’s loss-generating performance prompted by eroded quality of its assets (the portion of the overdue debts was recorded at 23% as at Apr. 1, 2010).

Disbalance of bank’s assets and liabilities by due terms.

Bank’s business procedures and risk management system require enhancements considering the fact that the bank provides its services in the riskiest segments of lending market.

Retaining adverse environment in the financial market and real sector of economy which may undermine borrowers’ solvency and weighs on bank’s financial indicators.