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IBI-Rating has affirmed the rating of bank deposit reliability of " FORWARD BANK" PJSC at 5+ grade

31.03.2016
Rating agency IBI-Rating informs on the affirmation of the rating of bank deposit reliability of «FORWARD BANK» PJSC at 5+ grade (excellent reliability). Rating of bank deposit reliability at grade 5+ indicates that the financial institution is reliable, pays its obligations timely within the requirements established by the current legislation of Ukraine, including those of the National Bank of Ukraine, and has a good reputation. The likelihood of problems with a timely return of deposits is low, as the financial institution is not sensitive to the impact of external and internal factors. The impact assessment of external factors does not apply to the situations involving force majeure circumstances.

The affirmation of the rating grade of «FORWARD BANK» PJSC is due to its sufficient level of capitalization, as well as the planned increase in the authorized capital of the Bank. The volume of highly liquid assets is at an acceptable level, and their quality is good. The actual values of economic liquidity ratios exceed the minimum allowable set by the NBU. However, further deterioration in loan quality and a possible outflow of customer funds may put pressure on the Bank's liquidity and increase its vulnerability to specific financial risks.

The owner’s funds and the clients funds remain the main component of the resource base. The latter are mostly formed by term deposits of individuals, which determines good diversification of the customer deposit portfolio by major depositors. With regard to credit risk, - it increases due to the Bank’s implementation of its activities in a riskier segment given the decline of real incomes of the population, while the customer loan portfolio is well diversified by major borrowers. During the 6 months under review, the significant amount of overdue debts has remained, although the Bank is working on its decrease.

Based on the results of 6 months under review, the Bank sustained a loss which has been caused by, among other causes, the transition to IFRS. Accordingly, performance indicators declined significantly. However, notwithstanding the above, the financial institution meet its obligations to creditors in a timely manner and in full.

IBI-Rating sees no factors which may lead to upgrading of the rating of bank deposit reliability in the short term. Downgrading of the rating of bank deposit reliability is possible in the event of worsening of the Bank’s solvency (liquidity); growth of credit risks due to deterioration of servicing of the granted loans, the Bank's increased vulnerability to market risks, increased losses, as well as deterioration of the political and economic situation in the country.

In order to perform the analytical research the materials provided by "FORWARD BANK " PJSC were used, including the annual financial statements for 2013-2015, other necessary internal information as well as the information from the public sources, which the rating agency considers reliable.

Finance department
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua