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23.07.08 Fitch Ratings Affirmed VAB Bank’s Ratings
The leading international rating agency Fitch Ratings has affirmed VAB Bank’s “B-” Long-term Issuer Default Rating, “B” Short-term IDR, “D/E” Individual rating, Support “5”, “BBB-(ukr)” National Long-term Rating. The Long-term IDR and National Long-term ratings carry Stable outlook.
Simultaneously, Fitch has also affirmed the ratings of Credit Suisse International's USD125m 10.125% issue of loan participation notes due 2010 at Recovery 'RR4' and Long-term 'B-' (B minus). The notes were issued solely to finance a loan to VAB.
The ratings acknowledge the bank’s reasonable asset quality, declining business concentrations, improvement in operating performance and timely equity injections.
The ratings have been influenced by the bank’s rapid loan book growth and the risks associated with it, tightening liquidity and high operating costs due to ongoing dynamic retail franchise growth and branch network expansion in line with the adopted strategy.
Since 2006, VAB’s focus has been on expanding its retail lending operations and by end-H108, retail lending comprised about 30% of the loan book. Also, reflecting the bank’s active retail deposit collection in the last years, the retail funding share outstripped the share of corporate funding for the first time in 2007.
Reference dataVseukrainsky Aksionerny Bank (VAB Bank) has been operating in the Ukrainian financial market since 1992 and belongs to the group large banks in Ukraine according to NBU. In October 2006, VAB Bank became a member of VAB Group. Branch network consists of 25 branches and 143 outlets throughout Ukraine and a representative office in Budapest (Hungary). A large international company, TBIF Financial Services (Amsterdam, the Netherlands), is among the bank’s shareholders. Total assets of VAB Bank amounted to UAH 6.7 billion as of 01 July 2008, total capital — UAH 908,6 million.
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