OREANDA-NEWS. October 19, 2010. Credit-Rating, a nationally recognized credit rating agency in Ukraine has announced that it assigned a long-term credit rating of uaBBB- (provisional) to Odessa-based FINBANK PJSC (‘bank’). The outlook on the rating is stable. In the course of the rating procedure Credit-Rating considered bank’s financial statements for 2005-2009 and 1H2010 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.

Provisional credit rating is a credit rating assigned with consideration of probability of events, which may substantially affect the creditworthiness of the entity rated. This rating may be affirmed or changed basing on the data obtained upon such events occurred or the situation remained unchanged.

Factors maintaining the credit rating

The majority of the bank’s key figures representing bank’s activities, specifically liquidity ratio, share of overdue indebtedness in the loan portfolio are adequate for the banking system.

Anticipated rise in the bank’s common equity to UAH100m by end-2010.

Bank’s assets and liabilities are well-balanced by their due terms.

Factors constraining the credit rating

Concentration of the bank’s loan portfolio and resources by major customers, which is explained by insignificant clientele beyond the group of companies that are associated with the bank’s owners, and makes the bank dependant upon financial state of its biggest customers and may negatively affect bank’s liquidity and capitalization.

Bank’s small equity.

The bank requires enhancements in its risk management system under low level of provisioning by lending transactions and significant amount of loans granted by discounted bills.

Low performance efficiency indicators of the bank.

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