Agency reaffirmed PJSC RADICALBANK’s reliability rating of individual deposits at 4 (high reliability)
Reaffirmed rating of individual deposits of PJSC BANK RADICAL proves high liquidity and adequate capitalization of the Bank. In I quarter this year regulatory capital increased by attracting 20 million UAH as subordinated debt.
Quality of equity and regulatory capital remains good. Bank consistently maintains the necessary amount of funds on correspondent accounts with the NBU, meets its obligations to creditors and, according to IBI-Rating, can rely on the support of the owners. The amount and proportion of liquid assets are at a high level, although they do not fully cover current liabilities. There were no significant complaints from customers. In Jan-Jun 2013 past due debt grew but its proportion is negligible.
Moreover, the Bank's vulnerability to credit risk increases the existing dependence of the Bank on financial situation of individual borrowers, which could put pressure on bank liquidity and capitalization. The main component of the resource base is customer accounts. However, concentration of the resource base by major creditors and customer deposit portfolio by major investors limits the Bank's financial flexibility and increases liquidity risk. In first half 2013 the Bank received profit. Performance indicators, albeit slightly increased, remain low.
Factors maintaining the credit rating: diversification the resource base by creditors and customer deposit portfolio by major investors, reduced dependence of the Bank on the financial position of major borrowers, implementation of key development strategies. Factors constraining the credit rating: decrease in the Bank's solvency (liquidity), increased credit risks due to deteriorating asset quality, decrease in KPIs, and deterioration in the financial markets and in the economy as a whole.
Analytical study used data from PJSC RADICAL BANK, including annual financial statements for 2010-2012 and January-June 2013, target indicators for II half 2013, other necessary inside information, as well as information from open sources deemed reliable by the rating agency.