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Fitch Keeps Bank Forum’s LT IDR/Support Rating on Watch Positive

February 13, 2008 | Cbonds

Fitch Ratings-London-12 February 2008: Fitch Ratings has today affirmed Bank Forum's (“Forum”) ratings at Short-term Issuer Default (“IDR”) 'B', Individual 'D/E' and Support Rating Floor 'No Floor'. The Long-term IDR of 'B-' (B minus) and Support rating of '5' remain on Rating Watch Positive (“RWP”) pending the purchase of a 60%+1 share in Forum by Commerzbank (‘A’/’F1’/’B/C’/’1’).

The ratings of Forum reflect its small size by international standards, modest profitability, relatively high borrower risk concentration in the loan book, risks stemming from rapid loan growth, and potentially vulnerable liquidity. The ratings also acknowledge the bank’s growing franchise, adequate asset quality to date and limited market risks.

The RWP reflects the benefits from the expected change in ownership and will be resolved if and when the transaction is completed. Upon the completion of the transaction Forum's Long-term IDR will be upgraded to Ukraine's Country Ceiling of 'BB-' (BB minus), based on the potential support available from Commerzbank.

The individual rating may be upgraded if the bank can demonstrate successful franchise expansion and sustained asset quality, and a major improvement in its liquidity position and profitability. Downward pressure might arise, mainly from weakened asset quality.

Forum is a medium-sized bank ranked 11th by assets in Ukraine at end-2007. Some 85% of its shares are controlled by a local businessman, Leonid Yurushev, and members of his family. Commerzbank has offered USD600m for a 60%+1 share stake and also secured the options to purchase a further stake of up to 25% of Forum during the next 36 months. In both cases the bank will be purchasing shares from Mr. Yurushev and his family. This transaction is subject to regulatory approval.

Company: Forum Bank

Country of riskUkraine
Country of registrationUkraine


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