On May, 26th in special issue of the newspaper "Uryadovy Kuryer" the “Rating of reliability of the Ukrainian banks", has been published, prepared by the analysts of the Rating Agency “Standard Rating” based on the public information. The rating included 85 Ukrainian banks which have been split by the Agency into 4 groups of reliability. 21 banks got the highest estimate of reliability from RA “Standard-rating” according Agency (pi) – scale:

1. Oschadbank - ua.1

2. ING Bank Ukraine - ua.1

3. Ukreximbank - ua.1

4. Corporate and Investment Bank Crédit Agricole - ua.1

5. Citibank (Ukraine) - ua.1

6. UniCredit Bank - ua.1

7. Ukrsotsbank - ua.1

8. Astra Bank - ua.1

9. UkrSibBank - ua.1

10. Alpha Bank - ua.1

11. Platinum Bank - ua.1

12. SEB Bank - ua.1

13. Praveks-Bank - ua.1

14. Crédit Agricole Bank - ua.1

15. Aktiv-bank - ua.1

16. Swedbank - ua.1

17. PrivatBank  - ua.1

18. Bank of Cyprus - ua.1

19. Prominvestbank  - ua.1

20. VTB Bank - ua.1

21. Subsidiary bank of Sberbank of Russia - ua.1

Common trends in the system

The results of banks in Q1 indicate on improvement of financial situation in the Ukrainian state banks and on growth of credit activity of financial institutions, including banks with foreign capital. For the Q1 2011 the banks issued UAH 18,9 b of new loans to the population. Crediting volume was essentially increasing every month. Also in Q1 according observation of the Agency the number of vacancies in banks increased in three times. The mentioned factors indicate directly or indirectly on that in H2 2011 the Ukrainian market expects next credit boom and acceleration of economic growth rates. The forecast sounded by the IFOs of 4-5% GDP growth in Ukraine in 2011, today already looks out as unfairly underestimated.

High rates of consumer credits growth multiply the consumption level in Ukraine, and the Agency expects GDP of Ukraine to grow by 5-7 % in 2011. The activity of the banks in the credit market remains one of main growth drivers. The acceleration of economic growth in H2 2011 will be positively stimulating the expectations of market participants and will improve the condition of public finances. The risk of second wave of crisis in the economy and bank sector of Ukraine has been actually brought to zero.

According to Agency observations, in Q1 2011 in comparison with the same period of 2010 the greatest rates of credit portfolios growth have been shown by: Subsidiary of Sberbank of Russia (+79 %), PrivatBank (+37 %), VTB Bank (+16 %), Bank Finance and Credit (+13 %). The statistics of credit growth on the system as a whole was ensured by PrivatBank which has poured more monies than other commercial banks into the credit system. From 01.04.2010 to 01.04.2011 the credit portfolio of PrivatBank grew by UAH 30,2 b. Namely the activity of PrivatBank and of the Russian state banks in Ukraine in Q1 2011 adjusted the total data on the market. It seems that namely such behavior of the largest country bank and of foreign banks imparted certain acceleration to the real sector.

Trends in highest rating group

Following Q1 the rating ua.1 was received by two categories of banks: the state Banks or banks with foreign capital. The only exceptions have been such banks with Ukrainian capital as PrivatBank and Aktiv - Bank which by Agency assessment finished well the Q1. The best condition was shown by the commercial banks with participation of foreign capital, traditionally strong in the corporate environment: ING Bank Ukraine, CIB Crédit Agricole and Citibank (Ukraine). They showed very high profitability, as for Ukrainian market. Traditional leaders of retail business with participation of the foreign capital, such as UkrSotsBank (UniCredit Bank), UkrSibBank (BNP Paribas), Praveks-bank (Intesa San Paolo) and Crédit Agricole (former Index-bank) also have received the rating ua.1. By Agency estimation, their financial condition improved in Q1 2011. The rating ua.1 also has been received by Astra Bank, subsidiary of the Greek Alpha Bank. Despite small scale of work, Astra Bank maintained very high level of capital adequacy (69 %), not proper to the Ukrainian banks.

We forecast that through Q2 and Q3 the credit activity of the Ukrainian banks will grow. Retail banks with participation of foreign capital from the far abroad, which have not been yet so active in Q1, should ensure major momentum of growth. Trying to compensate for poor quality of assets of their subsidiaries in Ukraine, the parent structures increased their authorized capital, filling them with liquidity. The tendency of credit investments growth, created in Q1, will push institutes with excess liquidity towards operations in the credit market.

Interfax-Ukraine