Moody's rates DonGorBank bonds A3.ua

Moody's Investors Service said it assigned an A3.ua national scale rating to the local-currency senior unsecured bonds to be issued by Ukraine-based JSC DonGorBank, which was also assigned B2 long-term and Not-Prime short-term foreign-currency deposit ratings, an E+ financial strength rating and an A3.ua long-term national scale rating.

The outlook is stable.

The agency said the ratings on DonGorBank reflect its small size, its limited franchise and its large share of business with the SCM group, which in addition to DonGorBank also includes a sister bank (First Ukrainian International Bank) and a number of industrial assets. They are also constrained by the high levels of concentration on both sides of the bank's balance sheet, as well as its modest capitalization.

However, the ratings are supported by Moody's expectation of an improvement in the bank's risk management and corporate governance thanks to the ongoing incorporation of new procedures and reasonable levels of profitability, resulting from relatively cheap liabilities and adequate asset quality. The ratings do not incorporate any element of government support, given the bank's low importance for the Ukrainian banking sector and economy. The agency said support from the shareholders is possible, but the probability is not significant.

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