JCR Eurasia Rating, consequent to the rating process, has assigned the rating of ‘A+ (Ukr)’ along with a ‘Stable’ outlook for PJSC – West Finance and Credit Bank on the Long Term National Scale, which denotes an investment grade credit rating. JCR Eurasia has assessed the Long Term International Foreign and Local Currency ratings as ‘BB-’. Other notes and details of the ratings are given in the table below:
Long Term International Foreign Currency : BB- /(Stable Outlook)
Long Term International Local Currency : BB- /(Stable Outlook)
Long Term National Local Rating : A+(Ukr) /(Stable Outlook)
Short Term International Foreign Currency : B /(Stable Outlook)
Short Term International Local Currency : B /(Stable Outlook)
Short Term National Local Rating : A-1(Ukr)/(Stable Outlook)
Sponsor Support : 2
Stand Alone : AB
PJSC – West Finance and Credit Bank, established in Ukraine by the ownership of Altınbaş Holding A.Ş. from Turkish origin, has maintained a primary focus on corporate and commercial borrowers and has been still located within the small scale segment since its foundation in 2007 although it has recorded cumulative growth trend above the sector. While this scale has deprived the Bank of positive effects from the network externalities and economies of scale, on the other hand, profitability indicators also supported by flexibility of managerial practices in market fluctuations, which had generated positive results even during the times of the global crisis, have contributed to the Bank’s internal fund generation capacity.
The high level of the Bank’s current capitalization level continues to provide facilities to absorb incidental losses arising during crises, swells in impaired loans and hence write-offs and declining net interest margins through tightening policies of the Ukrainian regulatory authorities. Additionally, it is assessed that realization of such events will not threaten the legal and targeted capital adequacy requirement limits within the short term perspective.
Although expected improvement in the financialization level of both the Ukrainian financial and real sectors and the low penetration level of the Ukrainian banking sector promise new avenues of growth for the sector, possible spillover effects of the EU debt crisis, persisting adversities in the business climate and increasing tension in the pre-election period are issues that require monitoring within the short term perspective.
Taking into consideration the existence of Altınbaş Group, with business activities in Turkey in several diverse fields, in the shareholder structure and sturdy funding mix of the Bank, the long term international foreign and local currency ratings are evaluated above the country ceiling of Ukraine (B+ / Stable).
The willingness of the shareholders to provide funds to the Bank and their history of doing so in previous years and the expectation of financial support to the sector to a certain extent by the local authorities in the case of emergence of systemic risks, the ‘Sponsor Support’ grade of the Bank has been assessed as (2). The current senior management’s ability to administer the risks undertaken to absorb posibble adversities given the capacity of the Bank’s strong equity base and capitalization level corresponds to the level of (AB) in ‘Stand Alone’ category under JCR-ER’s notation system.
For more information regarding the rating results you may visit our internet site http://www.jcrer.com.tr or contact our analyst Mr. Zeki M COKTAN.
JCR EURASIA RATING