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Moody's assigns B3/NP/E+/Baa3.ua ratings to Express Bank (Ukraine)

May 20, 2008 Сbonds
First-time ratings

Moscow, May 20, 2008 -- Moody's Investors Service has today assigned B3
long-term and Not Prime short-term local and foreign currency deposit
ratings and an E+ Bank Financial Strength Rating (BFSR) to Express Bank
("EB"). Moody's has also assigned a Baa3.ua National Scale Rating (NSR) to
the bank. The outlook for the global rating is stable, while the NSR carries
no specific outlook.

According to Moody's, the B3/NP/E+ global scale ratings reflect global
default and loss expectation, while the Baa3.ua NSR reflects the standing of
the bank's credit quality relative to that of its domestic peers.

Moody's notes that EB is unlikely to receive any external support in case
of distress. Hence, the B3 long-term foreign currency deposit rating
assigned to the bank does not incorporate the possibility of external

According to Moody's, the E+ BFSR reflects: (i) the bank's expertise in
servicing complex settlement and lending projects; (ii) EB's relatively
strong reported financial fundamentals; and (iii) the bank's potential to
further diversify into retail banking, supported by relatively developed
distribution. On the other hand, the rating is constrained by: (i) EB's
limited franchise within Ukraine; (ii) the high dependence of the bank's
business model on a single client; and (iii) limitation to strength
capitalisation level in a continuous growth scenario. .

Moody's notes that, at the current level, the upside potential of the
bank's ratings is limited. However, improved segmentation of the earnings
streams without deterioration in asset quality, along with a material
reduction in single-borrower concentration in loans and deposits, could
become positive rating drivers. A downgrade of the bank's ratings is not
very likely, but could result from a weakening of EB's market position
driven by migration of the core clientele if this were to result in a
significant deterioration in the bank's financial fundamentals.

EB is headquartered in Kiev (Ukraine). As of 31 December 2007, the bank
reported unaudited total assets under Ukrainian Accounting Standards of
UAH1.8 billion (USD350 million) and net income of UAH42.3 million (USD8.4
million) for the year then ended.
Company — Express-Bank
  • Full name
    Express-Bank PJSC
  • Industry