OREANDA-NEWS. March 16, 2010. Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it upgraded to uaBB+ (uaBB plus) from uaBB the long-term credit rating assigned to Kiev-based FINANCIAL INITIATIVE Commercial Bank LLC (‘bank’). Credit-Rating has also upgraded to uaBB+ (uaBB plus) from uaBB the long-term credit rating assigned to bank’s coupon bonds (series A and B) issued for the amount of UAH50m and UAH250 respectively to the series stated, with 5-year original maturity. The outlook on all of the ratings is stable. To revise the ratings Credit-Rating considered bank’s financial statements for 2005-2008 and 9M2009 and its other inside information.

An obligor or a debt liability with uaBB credit rating is characterized with the LOWER THAN SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is strongly 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.

Factors maintaining the credit rating

Low specific gravity of overdue debts.

Sufficient performance indicators.

Factors constraining the credit rating

High concentrations of the bank’s loan portfolio by main borrowers, which may negatively affect bank’s liquidity and capitalization.

High volume of funds raised from the National Bank of Ukraine on the short-term basis, which raises the liquidity risks and makes the bank dependant upon its biggest borrowers.

Risky lending policy accompanied by bank’s tending to taking market risks.

Bank’s risk management requires certain enhancements.

Growing impact of external factors on the financial market and subsiding business activities in certain sectors - this has negatively affected solvency of certain borrowers and weighs on bank’s financial indicators.