OREANDA-NEWS. On 20 June 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it assigned a long-term credit rating of uaBBB- (uaBBB minus) to Kharkiv-based Basis JSCB (`bank`). In the course of analysis Credit-Rating considered bank`s financial statements for 2003-2007 and 1Q2008 as well as 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).

Factors maintaining the credit rating

Low level of bad and doubtful debts in the bank`s customer loan portfolio (0.63% as of Apr. 1, 2008).

Bank`s key figures remain on adequate level for the national banking segment.

Factors constraining the credit rating

Low bank`s capitalization.

High level of concentrations in bank`s loan portfolio by primary borrowers (over 590% of the 1 st tier capital account for 20 biggest borrowers), which, accompanied by insignificant reserves for loan operations, may negatively affect bank`s liquidity and capitalization.

Significant concentrations in bank`s resource base, which erodes bank`s financial flexibility and raises the liquidity risks.

Bank`s assets and liabilities are balanced insufficiently by their due terms.

The bank`s risk management system requires further enhancements.

The bank is exposed to loss of its market position, due to bank`s narrow possibilities for customer attraction and growing competition in Ukraine`s financial market.