OREANDA-NEWS. December 27, 2010. Credit-Rating, a nationally recognized credit rating agency in Ukraine has announced that it assigned a long-term credit rating of uaBBB- (provisional) to Kiev-based EUROBANK Commercial Bank PJSC. The outlook on the rating is stable. In the course of the rating procedure Credit-Rating considered bank’s financial statements for 2006-2009 and 9M2010 and 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 " 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.

Provisional credit rating is a credit rating assigned with consideration of probability of events, which may substantially affect creditworthiness of the entity rated. This rating may be affirmed or changed basing on the data received upon such events occurred or the situation remained unchanged.

Factors maintaining the credit rating

Rising amount of long-term financing with funds raised from subordinated debt.

Insignificant portion of overdue debts in the loan portfolio.

Acceptable figures of the majority of financial indicators that represent bank’s key aspects of activities.

Factors constraining the credit rating

Weak market standing of the bank combined with poor diversification of income sources, which makes the bank more vulnerable to credit risk and liquidity risk under retaining adverse environment in the economy.

Concentrations in the loan portfolio by major borrowers coupled with low provisioning, which may negatively affect bank’s liquidity and capitalization.

High volume of investments in securities, which makes the bank more vulnerable to market risk.

Low bank’s performance efficiency indicators, prompted by limited capacity to manage operating efficiency (the profit-generating activity is underpinned by earnings from transactions with securities).

High concentrations of the bank’s resource base by major lenders, which makes the bank dependant upon financial state of a small number of its clients, and raises liquidity risk.

Retaining adverse environment in the national economy that may undermine solvency of certain bank’s borrowers and negatively affect bank’s key figures.