Solvency Rating of Trastbank Affirmed at "uzB++"
OREANDA-NEWS. On January 09, 2007 Akhbor-Rating Interbank Rating Company has affirmed Transbank's solvency rating at "uzB++" (national scale), the Banking Association of Uzbekistan reported.
The "uzB++" rating reflects the adequate level of solvency. The bank's capability to meet its financial obligations fully and on time is estimated as high compared to other banks in the country. However, the bank's solvency is more sensitive to the changes in the commercial, financial and economic conditions compared to the banks rated at A.
Trastbank Private Joint-Stock Exchange Bank is one of the fastest-growing private banks in Uzbekistan. It is among the top ten largest banks of the country according to the size of the deposits taken. The bank's rating takes into account its traditionally positive client base in the city of Tashkent, the adequate level of liquidity and acceptable profitability of its operations. The rating also takes into account high concentration of its balance in the region of the country's capital, the risks inspired by fast growth of the bank's active operations and comparative limitedness of the capital base (compared to the scale of the bank's operations).
The Trastbank's main competitive advantage providing its stable market position is the strengthening of the deposit base, expansion of its activity in the interbank and stock markets. In 2006, the bank's market share according to the size of the client's deposits made up 2,2% (compared to 0,7% in 2004).
The scale of the bank's activity is gradually increasing. In 2006, the bank's total assets made up 81 billion soums. Its market share in terms of the total assets made up 1,1% (0,3% in 2004). At the end of the first half of 2007 the bank's assets reached 125,4 billion soums.
In 2006 the volume of the bank's loan portfolio made up 12,5 billion soums. The priority areas of the bank's lending activity still include the production sectors of the economy, though in the recent years the bank has been observing expansion in the volumes of retail crediting. In the late 2006, the share of loans given out to private clients made up 22% of the total credit portfolio.
Fast growth of the bank's assets puts pressure on certain indicators of capital adequacy. The average growth of the bank's assets in the reporting period made up 109%, which is substantially lower than the growth of capital (27%). In 2006, the total capital of the bank made up 4.8 billion soums. The growth of the bank's capital is sustained primarily though the additional investments from the shareholders. In 2004-2006 two additional stock floats for the total of some 600 million soums were registered. In July 2007 the bank announced another stock float for the total of 1 billion soums.
The bank's profits are growing stably. In 2004-2006 the average annual growth of assets made up 47,6%. The activation of the bank's activity in the market for interbank deposits and the stock market improves the diversification of income. In the reporting period the bank's profitability indicators demonstrated a growth trend. In 2006, the bank's return on asset indocator made up 2,2% (in 2005 – 1,2%), the return on capital – 31,4% (in 2005 – 12,5%). Net interest margin in the same year made up 7,1%, which is quite high in the light of falling market interest rates.
The bank's liquidity is maintained at sufficient level. In 2004-2006 the share of the bank's liquid assets grew from 38% to 57% of the bank's total assets, and in the first half of the year 2007 – it reached 69%. This indicator of liquidity is the highest among similar size banks.
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